Tuesday, 13 May 2014

A Technology Insight on FLYHT Aerospace Drives A Positive Market Response


FLY stock moved to the positive side this morning after coming under recent pressure with much of the uptick attributable to an article posted in Technology Investment News. The article is called “Real Time Black Box Technology Takes Flight” and cites Portfolio Manager and Founder of Roadmap Capital, Hugh Cleland.

Mr. Cleland in his April letter to his fund’s investors went into great detail as to why FLYHT technology has the “go-to” technology. In the piece Mr. Cleland states “recent events (the disappearance of Malaysian Airline flight 370) have reinforced my expectation that FLY will be in the $1-$3 range within 3 years [200%-600% higher than current valuation].

Key highlights from the article:

  • Current "Black Box Technology" is pre-internet - so vulnerable to communications mishaps that it's like attaching a message to a carrier pigeon.
  • (FLYHT) has developed an emergency data streaming technology called "FLYHTStream". This technology sends critical data to ground-based operations using the Iridium satellite network through Iridium Communications.
  • Inmarsat's (ISAT-LSE) recent offer to transmit GPS location data every 15 minutes for free is not expected to compete with FLY's instantaneous stream of aviation data points including: location, altitude, airspeed, pitch, roll, yaw, engine performance metrics and airframe indicators.
  • Since January 2014 FLYHT has seen analyst coverage initiated by Clarus Securities, Byron Capital Markets, Salman Partners and Global Capital.
  • "We are initiating coverage with a SPECULATIVE BUY recommendation and $1.10 target price," states the Clarus report, "We estimate that the opportunity in China could generate ~$24-57 million in hardware revenue over the next three years, while incremental recurring annual revenue could be as high as $11 million".
  • The Salman Partners report forecasts "strong revenue and earnings growth in 2014 and 2015". It issued a SPECULATIVE BUY recommendation and a $0.85 target price [double its current share price].
  • "We are initiating coverage of FLYHT with a STRONG BUY rating," states the Global Capital Report, "and a 12-month target price of $1.00."
  • "Global movements catalyzed by the disappearance of Malaysian Flight 370 mean that the $2-$5 range for FLYHT is now quite possible on a 2-3 year basis," states Cleland, "Shorter-term, I will be surprised if we are not in the $1-$2 range by the end of 2014."

To view the full article, please click here.

Shares Issued: 142.5 million
Fully Diluted: 182.1 million