Imris Inc. (NASDAQ:IMRS)

CAPS Rating: 5 out of 5

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Player Avatar TSIF (99.96) Submitted: 3/6/2014 4:19:42 PM : Outperform Start Price: $2.03 IMRS Score: -39.60

I would normally wait for the 3-Day rule after a major share price move, in this case it was down....but I owed Teacherman1 a LONG idea, as he can't do anything with my rash of red thumbs of late.

I called this one early and didn't get optimal entry, but I like it as a LONG.

I explored Imris, Inc on the 20% saleoff yesterday. Checking out big market movers and experimenting with them is one of my "studies". What I found was a small cap company, well ahead of it's lows, but getting knocked down hard after disappointing quarterly earnings. This company has not been cash flow profitable since it's inception, but had been releasing new products.

The company recently moved 100 jobs from CA to Minneapolis. Perhaps the workers are frozen.
Part of the issue with quarterly earnings besides move expenses was that they received FDA and CE approval for their next generation image guided systems which surgeons can use during operations. I'm in a field where it's easy to obsolete yourself with a product roll and this appears to be part of what happened as orders were deferred.

Since orders are small, any deferral can produce and issue. Overall, they booked 11.4M of orders last quarter and now have a backlog of $102M. While a large percent of backlog never materializes, some does. That they had that much backlog, however, leaves question, but perhaps they are answered by the relocation and expansion.

The question will be if they have enough cash to turn the corner. They expect to be cash neutral in 2014. The big question I have is that they believe they can function without additional funding. This seems unlikely, but could happen if orders and payments sync.

The breadth of product seems sufficient and they will make some money off disposables and maintenance.

I believe they have a good chance, but there are few investors who will hold "dead money" in a hot market. The share price declined another 5%, typical second day selloff today to $1.84. I would be a buyer if this retreats further, but will watch it to see if there is a trend.

I believe, Teacherman1 that this might be investable in your timeframe and at your market cap...size.

The power of going cash flow negative to positive is huge for stocks.

I very well might take a ride, for now, a quick call up, not optimal, to try to get back on Teacherman1's good side. He's a fair but tough taskmaster!

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Member Avatar Teacherman1 (52.52) Submitted: 3/21/2014 12:06:59 PM
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Going to take a look at it now. Thanks for the "heads up", maybe I can make some money on it. :)

What's with the "taskmaster" comment, as an old and senile chaser of small cap stocks, I need all the help I can get. :)

Thanks.

Member Avatar Teacherman1 (52.52) Submitted: 3/21/2014 12:49:56 PM
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Only had time for a quick look, but it was enough for me to put in a limit bid for now.

Looks like there is a lot of institutional interest, and I do like Canadian companies :).

Would like to know the age of their receivables, and if they are putting them in hospitals on a trial (purchase to be decided basis) or as outright sales.

Was a lot of selling after the quarterly release, but that's a good thing if you are an interested buyer.

I will probably change my limit order later in the day if it doesn't take, and it hasn't gone up too much.

I think you found a winner for a change.:)

Thanks for the "tip", which, being made in public and by a non insider will keep the SEC away.:)

Would prefer to have them at about $1.50, but it is probably too late for that.

Have to go and pay the hospital for my wife's hip replacement surgery coming up on Monday. They are always very good at making sure they get their cut upfront.

Member Avatar TSIF (99.96) Submitted: 3/21/2014 1:53:29 PM
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I can usually tell when my elders are trying to guide me in the right direction, but that doesn't mean I'll listen unless you whack me with the ruler.... :)

The receivables are hard to trace, but dropped significantly last quarter. The lead time on getting a sell is up to year, with another year for delivery and installation. They meniton collaboratives, but I can't find any cases of thier loaning their equipment. They have over 40 installs in multiple countries. I like the breadth of hospitals buying from them. the $1.5-12M average sale could be a concern for smaller hospitals.

I would have liked $1.50 as well for dollar cost averaging in, but it's holding so far...

Tell the hospital that you only pay upon satisfaction for the hip! :)

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