Liquidmetal Technologies Inc (OTCMKTS:LQMT) has been a real winner for us this year. When we looked at the company back at the start of April, it had just started to pick up from end of March lows in and around $0.19 a share. At the start of August, the company had risen to $0.33 a share and currently trades just off that, closing out the session on August 29 at $0.32 a piece. Low to high, and say close to 70% run in around four months.
There is a near-term catalyst that we think could push the stock even higher. Here’s what we are looking at what we are expecting once the catalyst hits.
For those new to this one, Liquidmetal is a technological and manufacturing company that is focused on the production of what are called bulk amorphous alloys. Amorphous alloys are unique materials that are distinguished by their ability to be injection molded and die cast into high-performance applications for a broad range of markets. As the company’s name suggests, the best way to think about this sort of material is to imagine a liquid metal being poured into a diecast as opposed to something like plastic. The end product has the versatility of injection molding but with the strength and reliability of a metal product.
Last year, the company was in a bit of trouble financially until an investor called Professor Lugee Li provided a more than $63 million capital injection on the back of an equity raise, became the company’s lead investor in the process and then, in December, was named President and CEO of Liquidmetal.
During 2017, much of the company’s focus has been rooted in the allocation of this $63 million capital injection towards the building and fitting out of a new manufacturing facility in Lake Forest, California. In July, this year, the company officially moved from its previous facility to this one, which brings us to the upcoming catalyst we highlighted as worth keeping an eye on near term for shareholders and anybody thinking about pulling the trigger on an exposure.
On October 17, 2017, Liquidmetal will hold an “Open House” specifically devoted to shareholders and investors. There isn’t too much detail available as to exactly what this open house will involve right now, but basically, it is an event at which shareholders and investors can take a look around the new Lake Forest facility and, to quote the CEO in the press release announcing the open house, “to get a glimpse of what the future holds for Liquidmetal.”
Why is this a big deal?
Much of the uncertainty surrounding Liquidmetal has been rooted in the company’s ability to secure large-scale manufacturing contracts. Competing technologies, price and what turned out to be a disappointing initial run in with Apple Inc. (NASDAQ:AAPL) meant shareholders were uncertain as to whether the company could lock in such contracts going forward and, in turn, whether it could boost topline medium to longer term.
The on boarding of Professor Li helped to initially alleviate some of these risks, but shareholders still wanted to see confirmation that the company is growing and can continue to grow under his leadership. That a new manufacturing facility was built using Li’s cash also served to strengthen sentiment, but the invitation for shareholders to come and look at the facility is a real icing on the cake situation. It’s tough to imagine why any CEO would invite a group of shareholders to come and look at a new facility if said CEO didn’t have some fresh information as to the contracts that are in place to make use of the facility in question. It is in these contracts (that we are assuming exist) that we see near-term growth potential for Liquidmetal.
As mentioned, the open house will take place on October 17, so we will be watching closely for any updates both before and after the event that might be able to confirm the accuracy of our thesis.
We will be updating our subscribers as soon as we know more. For the latest updates on LQMT, sign up below!
Image courtesy of TimOve via Flickr
Disclosure: We have no position in LQMT and have not been compensated for this article.