Thursday, July 3, 2014

Seeking Alpha: Advanced Photonix A High-Risk Optoelectric Play

Microcap optoelectronic components company Advanced Photonix (API) hasn't had the easiest time of it, with supply issues interfering with its telecom business and frustratingly slow progress with the company's terahertz product platform. A recent equity offering has bought the company a little more breathing room and management is looking for 20% growth in the next fiscal year, helped by a strong recovery in telecom. The optoelectronics market is very competitive and customers constantly push for lower prices, but internal cost reductions, a ramp up in Chinese telecom spending, and increased fiber to the home bandwidth requirements could support better results.

Before going further, investors need to appreciate the above-average risks of a stock like Advanced Photonix. The company hasn't reported positive earnings in over eight years, nor positive cash flow, and the sharecount has more than doubled over that period. While the stock is relatively liquid, the market cap is tiny and this is a highly speculative investment candidate.

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Advanced Photonix A High-Risk Optoelectric Play

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