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Stan Piland

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  • Mitek Systems Could Be Headed Much Higher This Year [View article]
    About 40% of households with internet access use online bill payment, but growth has stagnated in the past few years. The main reason is that entering the data can be intimidating and is a hassle.

    But banks know that online payments are much cheaper to process than checks. And they know people who use online payment consistently use more services from their financial institution than the average customer. And they know the connection between online payment use and costomer loyalty is quite strong.

    So banks need to foster greater utilization of online payment services, and they think the best way to do that is to make it easy. I think the rapid growth in mobile banking suggests customers are growing comfortable with the technology, so MPBP is the next logical step.
    Feb 4 02:01 AM | Likes Like |Link to Comment
  • Mitek Systems Could Be Headed Much Higher This Year [View article]
    New shares will likely be used for incentive pay over time. I don't think they will do an offering with the stock price at these levels, and don't think they really need the cash at this point.
    Feb 3 02:00 PM | Likes Like |Link to Comment
  • Mitek Systems Could Be Headed Much Higher This Year [View article]
    Nice article. And as one who has been involved with MITK for several years, I agree that the stock should easily return to double digits. It's even better than you think, however. First, on their call Jan 31, management raised the total to 708 signed banks, including all of the top 10 retail banks and 32 of the top 50. A total of 318 have launched the service compared with 205 last quarter, representing a 55% increase.

    The revenues for Mobile Check Deposit (MCD) have indeed been lumpy, and since revenues are booked up front, they are dependent upon reorders for follow-on revenues. But the 6-12 month systems integration prior to launch is past for most of the largest banks, and the service is wildly popular with end users. Management has said that sequential transaction growth has exceeded 25% for each of the past 3 quarters. MITK gets an average of about 10 cents per transaction, and over time, transaction growth and revenue growth must converge. Importantly, the advantage to their revenue model is that it provides much better leverage to the ultimate success of the service with end users.

    I agree that Mobile Photo Bill Pay (MPBP) is a game-changer. The TAM is even larger than MCD, and their per-transaction fee is higher. Moreover, revenues are billed ratably rather than up front. They already have three signed deals for MPBP including USBank, channel partner and bill payment processor Allied Payment Network, and one unnamed bank which is thought to be JPMorgan Chase. Online bill payments have not grown in the past few years, because entering the data is a pain in the butt. But MPBP eliminates the hassle of entering data manually for customers. And the cost-per-transaction is MUCH lower than that of check processing for banks. So once this product starts to launch, the ramp in adoption will likely be very fast.

    I agree the USAA litigation presents somewhat of a binary risk, but much less at $4.00 than it did at $9.00. If MITK loses, it will have to share some past revenues. But if MITK wins, it will likely win sizable punitive damages filed under the Lanham Act for unfair business practices. In the meantime, USAA appears to be running its mobile deposit system on a first-generation platform, which is inferior to later generations. And since there does not yet seem to be a competing MPBP platform on the market, USAA will likely be shut out of this important market until it settles. In brief, I like my odds on a favorable settlement.

    Bottom line, I'm glad you wrote this excellent article, and I agree that this could be a big stock in the next year or so. Thanks!
    Feb 3 10:31 AM | 1 Like Like |Link to Comment
  • New Freeport Still Worth A Look [View article]
    Nice article, I also like FCX. I would add that the PXP/MMR acquisitions add not only gas exposure, but specifically U.S. gas exposure. Gas in the U.S. is far cheaper than in other markets, and will likely rise as the global market for LNG continues to develop. So while small, gas will provide a great secular growth opportunity. Although I understand investors reservations about diversification into energy, I actually thought it was a pretty good fit.

    My prediction is that RIO will try to buy FCX within the next year, and maybe within the next few months while the stock is so cheap.
    Jan 6 12:02 PM | Likes Like |Link to Comment
  • Quality Of Earnings Issue At Jarden Corp. [View article]
    This is a really thoughtful analysis...thanks! I would feel better about the short if it traded at little higher valuation on eps.
    Dec 25 01:51 PM | Likes Like |Link to Comment
  • OCZ Technology: A New SSD Called Vector And Potential Licensing Agreements [View article]
    Board member Ralph Schmitt just resigned as CEO of PLX Technology. PLXT is in the process of being sold to IDTI. Think OCZ may have found a new CEO...
    Oct 9 07:10 PM | 1 Like Like |Link to Comment
  • OCZ Technology At 52 Week Low: Sinking Ship, Or Can New CEO Seal A Buyout? [View article]
    OCZ has estimated the SAN replacement market to be a $23 bil opportunity. FIO says more like $28 bil. Both address different segments of the market, so are unlikely to see each other in competition.

    The Z-Drive R4 series of drives have had the best reviews of any product in the industry in every respect, including speed, reliability, and cost per iops. In a head-to-head comparison with the FIO io-Drive Duo, The Z-Drive R4 won by a "KO." http://bit.ly/RnKeeh

    As of February, the Z-Drive R4 was in over 500 qualification trials. Trials typically last 12-16 months. It has been qualified for the MSFT Azure cloud platform. Azure is said to be all SSD-based, and I'm not aware of any other product yet qualified. There are several trials which could each easily result in multiple hundred-million-plus annual revs within the next few months. So I have estimated SAN replacement could contribute over $200 mil revs at 50% GM in 2H2013.

    I think management shares this expectation; that's why they made the deliberate decision to ramp up inventories, Sales & Marketing, and R&D spending. I am hopeful that new management better communicates this expectation to the street.

    Although
    Sep 28 09:42 AM | 1 Like Like |Link to Comment
  • OCZ Technology At 52 Week Low: Sinking Ship, Or Can New CEO Seal A Buyout? [View article]
    So far, they have not accessed the WFCF credit facilty. However they will probably need it to fund the ramp in SAN Replacement sales in the second half.
    Sep 26 03:03 PM | Likes Like |Link to Comment
  • Fusion-io: Centralize Your Portfolio On Data Decentralization [View article]
    Definitely been roughed up a little. But when you do this as long as I have, you come to expect it sometimes. Based on disclosed information, objective product reviews, SEC filings, earnings and cash flow models, etc., I think OCZ is grossly oversold and worth much more. If anyone has material non-public information that would justify the selling, please share...lol
    Sep 26 01:06 PM | Likes Like |Link to Comment
  • OCZ Technology At 52 Week Low: Sinking Ship, Or Can New CEO Seal A Buyout? [View article]
    Nature abhors a vacuum, and so do investors. I am sticking with OCZ, despite the weakness. It is important to recall that OCZ's strategy was to use the cash generated by their industry-leading consumer products to build out the higher-margin enterprise business.

    The 50% gross margin Z-Drive R4 has been in trials for over a year, has had the best reviews in the industry, and has been qualified at Microsoft and others. Much of the cash burn in F1Q and F2Q was to build eMLC inventories and a sales force to sell this product. I still think this business will be a large source of incremental sales growth in the second half.

    Although margins on the Vertex 4 will be pressured by the flash shortage, they were initially expected to be above 30% vs company average of 25.2% in the 1Q. I expect margins to be down a little, but do not expect the collapse some investors envision. Further, I think it's important to note that the Vertex 4 and Agility 4 have been quite successful in the marketplace. A recent scan of newegg top sellers showed that OCZ had 3 of the top 5 and 5 of the top 10. This performance is not suggestive of a disaster, imo.

    Clearly the market is unwilling to attach much value to the volatile consumer drive business. But once Barefoot 3 and Z-Drive R4 revenues and profits are more visible, I still think the stock should be much higher.
    Sep 25 11:14 AM | Likes Like |Link to Comment
  • Molycorp And 'The Pain Ahead' [View article]
    As lacking as this article may be in facts or insight, it sure seems to have helped create a nice buying opportunity...thanks!
    Sep 24 02:35 PM | 1 Like Like |Link to Comment
  • Molycorp And 'The Pain Ahead' [View article]
    Strange that this article doesn't mention that conflicts over the Diaoyu Islands are heating up again, perhaps even more than before. There are demonstrations all over China and massive destruction of Japanese cars and other products. The CCP is even considering delaying part of the Generational Leadership changeover to allow Hu to maintain control of the military, rather than change leaders at a time of heightened conflict.

    Moreover, China has recently set minimum production threshholds which will reduce production by around 20%.

    While REE prices can indeed be volatile, these metals are strategic in that they are used in virtually all electronics, including military technology. Heightened geopolitical tensions and reduced Chinese production should be beneficial to the low-cost US producer of these minerals. I think MCP is attractive at these levels.
    Sep 24 11:56 AM | 2 Likes Like |Link to Comment
  • OCZ's CEO Resigns: Can New Management Solve The Firm's Problems? [View article]
    I do not understand why people don't give OCZ more credit for the Z-Drive R4 PCIe products. They have been in numerous trials for 4 quarters now. They have the best reviews of any product in the industry and have recently been adopted by MSFT. They are extremely cost-competitive with FIO products and still have 50%-plus gross margins. Revs for these products have not been incorporated into guidance or street estimates.

    OCZ's problems have been operational missteps and overly aggressive investment spending. Products and demand have been great. With STX's supply chain, marketing muscle and cost structure, a $1 billion acuisition would be accretive within 1 or 2 quarters.
    Sep 19 02:40 PM | Likes Like |Link to Comment
  • OCZ's CEO Resigns: Can New Management Solve The Firm's Problems? [View article]
    I would expect STX to provide some insight into their SSD plans at their Analyst Day this Friday Sep 21. As I have noted before, STX is far behind the curve in SSDs. In my opinion, OCZ's suite of consumer and enterprise SSDs, new controllers, and VXL software would enable STX to leapfrog most competitors. Also, STX CEO Steve Luczo is on the MSFT board; MSFT has been the most prominent early adopter of the Z-Drive R4 SAN Replacement product.

    I would have liked better execution and a much higher stock price, but I will be surprised if OCZ doesn't get acquired before they appoint a new CEO. My main question is whether MDC or MU make competing offers, or if they just let STX walk away with a cheap deal.
    Sep 19 02:02 PM | Likes Like |Link to Comment
  • OCZ's CEO Resigns: Can New Management Solve The Firm's Problems? [View article]
    I'm one of the few who actually supported Ryan Petersen. He's been aggressive with spending, but he has made the right acquisitions, and he's taken the company into the higher margin enterprise business (we have yet to see the benefits of that enterprise business.) Further, Art Knapp actually retired a few years ago, and Ryan brought him back. Alex Mei was one of the 20 first employees, and he knows the company and its markets as well as Ryan.

    My view is that while Petersen's departure MAY suggest the quarter is even worse than expected, it ALMOST CERTAINLY suggests the company is for sale. Petersen was viewed as an impediment to selling the company, because he thinks it is worth so much more. In that respect Petersen is right; there is real IP and real sales momentum here.

    As a final observation, if the stock fails to perform in coming months, it would not surprise me if Petersen attempts to regain control of OCZ by taking it private. He founded this company, and despite a few rocky quarters, he built the leading company in the industry. In any respect, I expect now OCZ will be acquired relatively soon, albeit at lower prices than I originally expected.
    Sep 18 09:32 AM | 4 Likes Like |Link to Comment
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