If anyone is interested in SSNI and hasn’t yet read Bert’s article from a couple of days ago, I recommend it. Here’s a brief summary, but you should read it all.

In the smart grid and smart meter universe they won all three huge mega-deals that came on the market thus far in 2016. This gives them further momentum, as if you were another utility looking for someone to supply smart meters, you’d know that although they are a small company, they have already been well vetted. It adds a bit of a moat.

Its secret sauce is its networking technology software, which is additional moat.

Some of its competitors have been unsuccessful in building out large networks without lengthy installation periods. This is very important. SSNI has know-how too.

Its financials do not really represent the potential financial impact that the mega deals will add over the years. For example, its recurring revenue line is growing, but doesn’t yet reflect the larger transactions.

It has a strong international pipeline but it has not yet closed huge deals there so far this year. (Pilots in London and Paris)

It is continuing to work with municipalities to roll out large intelligent street lamp deployments.

Its new CEO, Mike Bell, may be an important factor in its success in the closure of mega deals. He helps in a sales capacity as well as overseeing development projects. Coming from Intel and Apple, he lends gravitas.

Bert points out that there is no realistic way to quantify the case to buy these shares. No one is buying them because of their current earnings or cash flow, but EV/S at less than 2X is quite low given their “real” growth. And reported revenues, showing 3-4% growth, is out of step with the large awards the company has closed. He concludes that investors will simply have to decide on the basis of limited data that SSNI is one of the leading players in a space that will transform the landscape over the next several years.

I think of it like how smart phones replaced dumb phones all over the world in 10 years, once they got started.

Read the whole article:…



Crikey you’re up early again Saul.

Yeh - I read it all. It was a good and useful piece. I’m happy to hold but I don’t like the lack of clarity on how to value the business.

I think the smart phone replacement is interesting but may not prove a realistic analog.

I find consumer consumption and consumer electronics consumption a lot more homogenous than B2B and infrastructure consumption.

Everywhere has adopted smart phones but if you compare infrastructure along a continuum (Top end) Japan vs Singapore vs China vs Scandinavia vs ME vs Europe vs US vs UK vs LatAm vs Africa and India (Bottom end) then the differences are astonishing. Japan has a network of hi speed trains whilst UK can’t even build its second one. China has unbelievable city scapes, infrastructure and technology and built a metro in Beijing in 6 months. India has the same pile of rubble lying by the road side outside the Mumbai airport that was there when I first visited in 2002.

I wish there could be a network effect causing parabolic city adoption uptake curves but I can’t see it as much as the network effect of everyone being on whatsapp etc.



Thanks Saul and Ant,

I enjoy this author’s frankness and ability to tell both sides of the story. I tend to agree with Ant on the ability of US municipalities to spend on infrastructure. We’re barely repairing rather than upgrading. One of the points coming out of the current FOMC meeting, however, is a suggestion for the government to provide more $$ to boost the economy with respect to the gap in investment…

See here:

If we are going solar and wind to replace coal power then we need smarter grids becasue of the swings in those energy sources. So I like the SSNI story in that respect. The cynic in me says the following:

• Great salesman CEO (like the one from FEYE?) Oh.
• Spending on offices in Silicon Valley where competition for engineering talent and real estate costs go against shareholder friendliness. What comes next - big bonuses for managers when they start taking the big contract $ to the income statement I suppose.
• Our technology is better and the market is on the verge of explosion (like INFN?)

Just sayin

BTW RE: SAul up early (I was up at 4am myself) —…

beating my chest,

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What do you think is a good buy price for SSNI? I recently made some money writing puts at $12.50 that expired. The current share price is about $14, but not that long ago it was quite a bit below $12.50.