During the last session, the stock of the company went 33% up on a large turnover of over 3.49M shares that changed hands. This beats seven times the average trading volume.
It was not only the shares rise that made BSM managers scream with delight. It was much more the new huge order that the company received. Yesterday, BSM informed it has been awarded a $1.1M contract to provide its Sentinel FM asset tracking solution “to a major U.S.-based service fleet.
In accordance with the deal, BSM equipment will be installed on approximately 850 vehicles. As stated in the release, “Sentinel FM is a robust asset tracking platform for real-time fleet management”.
The news is great. However, the financial condition of the company does not seem to be that great. At the end of last year, BSM had only $451K in cash and $1.19M of working capital.
To some people, it might seem enough. Yet, with the current cash-burn rate, this money will be sufficient for . . . virtually nothing – having in mind that only for the last quarter of 2010 total expenses were almost $2M.
Though the company happily proclaimed positive income for the third consecutive quarter, together with rising revenue and gross profit, there is still what to be desired regarding its financial condition.
Finally, it is worth noting that the current market capitalization of BSM, which is $9M, seems a bit exorbitant compared to the $3.76M net worth of the company. It means that judging by its fundamentals, BSM Technologies is overvalued on the market.
BSM designs Global Positioning System (GPS) based hardware and software solutions that are integrated with anti-theft and Automatic Vehicle Location functions.
