PFIE

It’s getting killed right now.

Getting a little bit too cheap.

Anyone have a conviction rating about this one?

I’ve read a lot of the material and earnings and projected earnings and really like the story.

It’s organic growth in a rapidly growing field (oil, natural gas).

What’s your guts telling you on this company?

Keith

The co. had a news release this morning talking about their various initiatives and expansion efforts. I thought it was positive, indicating the co. is growing its business. Apparently the market disagree with me. Did the market see a lot of spending coming and would hurt the bottom line? But you have to spend money to make money. As long as they are investing in future business opportunity/growth, I am fine. I take that spending as a good sign.

http://finance.yahoo.com/news/corporate-profire-expanding-sa…

BTW, I think I read somewhere that they are doing business with the Russians. So that part of the business may get hurt but that must be a very small part.

Regards.
-M

My gut is telling me I shouldn’t have listened to it when it told me to buy in at $4.35. Not sure if it was wrong then, or wrong now.

Getting a little bit too cheap.

Anyone have a conviction rating about this one?

I would say I put it at about a 3 or so.

LTC

1 Like

Looks like the CEO, CFO, and COO dumped 900,000 (~$3.5m) shares on 7/28. I guess they were not content with the 1.5m shares they unloaded on 7/3. (~$6m)

http://openinsider.com/PFIE

Unsettling, or…

The sales look like the ‘pre-defined’ and ‘pre-determined’ kind to me. They are at the $4 mark which was the pricing of the recent offerings and financing. The amounts sold (375k) by the ‘two big guns’ are equivalent to roughly 2.5% of the total number of shares they own.

That satiates my concerns a bit. Any one else with thoughts? Am I reading it right?

I am wondering about the heavy downward pressure; shorts? Also wondering if the pressure may not get to be too great and blow the cap right off this well on 8/12; Good earnings and growth history and vast opportunity.

Give some more experienced and expert feedback,

KLVanLiew

I suppose it does put things in perspective a bit. However, it seems any time this stock grows legs, they are immediately cut off by an issuance of shares, or management sell off.

The only other dissent I’ve come across revolves around how green the new Marketing Manager is, though I think those may be a vocal group of shorters.

I read their press release again and I didn’t smell anything funny. They are expanding, with the recently raised funds, I think.

They are adding headcount in marketing. They plan to add 16-18 people in sales. They are also adding people in finance, accounting and communication.

They are adding Sanmina Corporation as their contract manufacturer, and are expanding their own Lindon facility with 15,000 square feet for product assembly, inventory and quality control.

The company remains debt-free, and expects to file its quarterly report for FY2015 Q1 on or before August 14th 2014.

I could be wrong and often am but all this sounds to me like a fast growing small company preparing for the next phase of growth.

The insiders sold a bunch but that does not mean they are jumping ship. They still own a bunch and they have a constant flow of cheap option grants coming in. So they do not have to worry about selling too soon.

I think they made this press release as an attempt to calm the market after a few days of dropping, possibly accelerated by insider selling. If they missed earning or revenue, they could have easily added a line or two to warn the market in this press release. But they didn’t, which bodes well.

The recent secondary was at $4 so I thought the intrinsic value of the company would be at $4/share. Again I could be all wrong. The earning report will tell us a lot.

BTW, generally insiders can sell only within a predefined window after each Q’s earning release. But they sold as recent as 7/28, two weeks from earning release. That cannot be normal insider sells. They know the rules or they will be sued quickly. Could that be part of the 2ndary offering? I don’t know. I am just asking. According to Yahoo Finance, the share price on 7/28 was


                Open    High    Low     Close
Jul 28, 2014	3.73	3.91	3.70	3.74	 

It never reached $4.

Regards.
-M

4 Likes

LINDON, Utah, June 27, 2014 (GLOBE NEWSWIRE) – Profire Energy, Inc. (PFIE) today announced the pricing of a $24,000,000 underwritten public offering of 6,000,000 shares of its common stock, at a price of $4.00 per share. 4,500,000 of the shares in the offering are being sold by the Company. The remaining 1,500,000 shares of common stock will be sold by certain stockholders of the Company who are members of management.

The sales by the executives was pre-announced as part of the secondary offering priced at $4. If you recall, at the time this was announced it was over $4. Perhaps the extra shares sold by the executives were to reach some number to satisfy the underwriters? If so, it was better than further dilution.

Steve

1 Like

I am wondering about the heavy downward pressure; shorts? Also wondering if the pressure may not get to be too great and blow the cap right off this well on 8/12; Good earnings and growth history and vast opportunity.

Give some more experienced and expert feedback,

KLVanLiew

KL,

They would unload not now but after 8/12 if that were the case!

R

Perhaps the extra shares sold by the executives were to reach some number to satisfy the underwriters?

Steve,

Is this a common practice? I’m new to this arena, so I’m very unfamiliar with what is considered “acceptable behavior” in regard to management selling shares.

Is this a common practice?

slips,

I really have no idea. It was pure speculation on my part, and thus the question mark at the end. I thought maybe someone else might weigh in on that possibility.

Steve

I grabbed some more PFIE. This company is already profitable with a ton of projected growth. I feel more confident about this one than SZYM.

Not sure if I should or not.

But the trend right now is the smaller the stock the more its going to get punished. Russell 2000 is down for the year according to Bloomberg radio. Everyone is waiting for a 5% - 10% correction.

2 Likes

PFIE’s getting killed right now. Getting a little bit too cheap. Anyone have a conviction rating about this one? I’ve read a lot of the material and earnings and projected earnings and really like the story. It’s organic growth in a rapidly growing field (oil, natural gas). What’s your guts telling you on this company?
Keith

Hi Keith,

I was worried too. I emailed my friend Walter Ramsley, who runs a small mutual fund, and whose newsletter Growth Stock Insider (http://www.growthstockinsider.com) first introduced me to PFIE. I wrote

Walter, where do you stand now with PFIE? Their continuing slide is troubling, to say the least.

Walter wrote back:

Not sure what’s the theory behind the selling. Oil and gas prices are declining, so Profire’s customers theoretically will have less money to spend. And the current quarter will be flat despite 40%-50% sales growth! more hiring. I’m holding.

In the meanwhile I added a little more at $3.25. I see PFIE as a completely different picture than HZNP, for instance. HZNP crashed for a very good reason, which changed the whole story. There is no good reason for PFIE falling. Revenues rising rapidly, PE reasonable and falling, great product which people need, etc. On the other hand it’s a small company which will swing up and down more than the markets. Quillinpenn just posted a graph of how the entire S&P 500 has crashed in the past week. Did all those companies suddenly have business problems? Of course not.

And finally, some of the people who bought in the recent secondary with the hope of a quick pop, may have gotten discouraged and just sold out at the bottom.

Best,

Saul

6 Likes

Here’s the companies update on their expansion. It’s the picture of a company that is booming! Growing like mad. Anyone selling is worried about how all this expansion might affect one quarter’s earnings, not where the company is going.

Saul

Sales & Marketing Teams, Advancing Key Operational Initiatives

Company Hires Marketing Manager, Expands Sales/Service Teams to Grow North America Presence;

Nears Completion on Warehouse Expansion, Contract-Manufacturing Development

Profire Energy, a technology company which manufactures, installs and services burner management systems and other combustion technologies for the oil and gas industry, is expanding its marketing, sales and service teams. It is also nearing completion on a number of operational initiatives, such as its Lindon, Utah warehouse expansion and the addition of another contract manufacturer for its manufacturing of selected US products.

Personnel Expansion

We have begun expanding our marketing efforts by recently hiring Mr. Clayton Bird to manage the department…We expect to quickly expand the department in coming weeks, to accelerate revenue growth and educate the industry on the value of enhanced burner management products. The department is expected to greatly enhance our sales capabilities by employing multiple media throughout North America, as it structures a comprehensive and strategic approach to marketing our various product lines through key industry channels.

As the industry leader, one of our key roles is to educate the industry and develop increased awareness for burner management products and the economic, safety and environmental value propositions that such can afford. Profire expects that building its marketing team will allow it to reach out and educate the industry in an unprecedented, scalable, and cogent way. The marketing team will work closely with our growing sales and service professionals.

We also plan to hire an additional 16-to-18 new sales and service employees in the coming months to enhance our reach within North America, especially in Colorado, North Dakota, and other attractive markets. We also expect to employ some of these personnel to develop strategic sales channels, such as OEM sales, in addition to expanding sales through our existing geographical sales regions. With an estimated 45,000-50,000 new wells being drilled a year in the US, we expect the OEM channel to be a significant growth opportunity within the industry.

We are also building out our finance, accounting, and communications teams to handle increasing workloads in those areas. Nathan McBride has been promoted to VP Strategy & Finance, and will assume an enhanced role in developing and executing the Company’s growth strategies and resource allocation. Additional staff are being brought in to bolster other areas as well, such as accounting, administration, training, product-management, and multiple others as the Company anticipates continued acceleration in operations.

Operational Expansion

Profire has started working with Sanmina Corporation to supplement its contract manufacturing capabilities for several US-based products. Sanmina is a publicly traded, Fortune 500, $6 billion manufacturing and logistics company. The Company expects Sanmina to help support its scalability, geographic manufacturing-diversification and increased pricing power for supporting components of the Profire product line.

We are also on track to complete our Lindon expansion (which has been scheduled for completion in the Fall of 2014), which will add approximately 15,000 square feet for product assembly, inventory and quality control. The warehouse’s layout is the result of internal and external analysis and consulting that is expected to greatly enhance the flow and delivery of products, helping ensure a highly efficient and scalable operation.

The company remains debt-free, and expects to file its quarterly report for FY2015 Q1 on or before August 14th 2014.

5 Likes

But they sold… 7/28, two weeks from earning release. That cannot be normal insider sells. They know the rules… Could that be part of the 2ndary offering? I don’t know. I am just asking. According to Yahoo Finance, the share price on 7/28 … never reached $4.

mview, You must be right. They couldn’t have sold all those shares at $4.00 on a day when the price never got near $4.00. The market would have had to have traded at around $4.00 for most of the day. Also, all those sales at exactly $4.00??? It must be an accounting thing from the secondary, of when the sales got registered.

Saul

The sales by the executives was pre-announced as part of the secondary offering priced at $4. If you recall, at the time this was announced it was over $4. Perhaps the extra shares sold by the executives were to reach some number to satisfy the underwriters? If so, it was better than further dilution. Steve

Steve, You are undoubtedly right.

My gut is telling me I shouldn’t have listened to it when it told me to buy in at $4.35. Not sure if it was wrong then, or wrong now.

Haha…I beat you by a penny and bought in at $4.34.

I am more mystified/curious than worried and expect this to turn around unless there’s something we don’t know.

This is a micro cap and they are volatile just because.
PFIE really has a fine business and it’s growing and federal regulation is on their side so I think it is just an issue of time to develop…what’s to worry?
Mykie