Start of the Day with Chris Forte – RELL

Posted on August 4, 2022 by Scott Shuda

The Small Cap Technology Grand Slam: Four winners on the way up, SILC, HLIT, BELFB, and RELL. Part 4

Batting clean-up is Richardson Electronics (RELL), a company hitting home runs with new products in the green energy field.

Author Paul Franke says RELL has “a potential category killer product for ESG wind turbine owners, while progress is being made to adapt the idea for wireless towers, railroad locomotives, and solar power plants, anything needing cheap and quick energy storage. The invention is called the ULTRA3000 capacitor, which can economically serve as a type of energy storage device, replacing expensive, short-life and heavy metals-based batteries.”

Wind turbines have batteries at their base. There’s tens of thousands of wind turbines that could benefit from RELL’s patented ultracapacitor. The same with over 300,000 cell towers.

They also have an exciting battery replacement project underway with a division of Caterpillar for their 39,000 locomotives at $1M a pop.

They now make “magnetrons” for customers that produce synthetic diamonds, recycle old rubber tires into floor tiles, and convert methane gas into acetylene and hydrogen, also called “the gas of the future.” RELL is now a green power play in a big way.

In the words of the company. . .

“Fourth quarter sales were $61.6 million, the HIGHEST QUARTERLY SALES highest we have achieved since 2011. Fourth quarter gross margin improved at 32.7% versus 31.8% in the third quarter.

“Total sales for FY’22 were $224.6 million, an INCREASE OF 26.9% over the prior year. In addition, BACKLOG ROSE AGAIN TO $206.2 MILLION, NEARLY DOUBLED to where we ended FY’21. This supports the continued growth we expect to achieve in FY’23.

“SIMPLY PUT, OUR BUSINESS IS FIRING ON ALL CYLINDERS AND I BELIEVE WE ARE JUST GETTING STARTED.

“As of now, we are not seeing the impact of the recession on demand for our products.

“This is the most profitable year and quarter that we have ever had – it looks like we will do $250 to $255 million next year without any problem. WE ARE ON TRACK TO BE A $500 MILLION COMPANY HERE IN THE NEXT FIVE YEARS AND EXTREMELY PROFITABLE.

A couple of analysts comments were, “Congratulations on an exceptional quarter. A lot of exciting things going on.” and “You guys are really knocking the cover off the ball.”

RELL has a strong balance sheet, $40M cash, no debt, 12M shares outstanding, and 1.66% yield.
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QUICKIES
*
Josh Ebben posts news on the Feed, “BoardwalkTech Expands License Again, with Major Accounting and Consulting Firm.” The firm has over 300,000 employees and this increases the annual recurring revenue by an additional $500,000 this year. The news propelled BWLKF 10% yesterday.
*Silicom Receives ~
$3M Edge Product Order from Fast-Growing SASE Company. SILC was featured here on Monday.
*
Scott Shuda posts info on networker Clearfield Inc (CFLD) which he introduced in late April. Since then it has almost doubled.
*It was a busy day for companies discussed on Breakout Investors with earnings reported by
INFU, SITM, INMB, INVE, EVC, BCRX, TGLS, KRMD, SPT, GRBK, and there’s more on the way. Do yourself a solid and get some solid insights on out platform.
*James Bullard, St. Louis Fed Pres: We are not in a recession, a soft landing is possible, and the Fed will have to keep hiking rates.
*
Ashleigh Day posts on the Feed, “Sales of electric heaters have surged 35% as Germans prepare for a possible energy crisis this winter.”
*Another hot seller here in the US is backyard plunge pools. They’re deep enough to stand in and typically run from 6 1/2 to 10 feet wide and 10 to 22 feet long. Some are equipped with jets so you can swim in place.

“Reportedly, the C.I.A. targeted al-Zawahri with a drone strike while he was on the balcony of his house at 6:18 a.m. on Sunday. That’s so early. He was drinking from a mug that said, ‘Don’t talk to me until I’ve had my hellfire missile.’” — STEPHEN COLBERT

Good luck to all – Chris

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