Energy Focus (EFOI) Looks Oversold, Ready To Bounce

Energy Focus (EFOI) has carved out a nice niche, making retrofit LED lights to replace fluorescent tube lighting for the military and commercial institutions. They have received large orders from the Navy and sell to a variety of commercial customers. Replacing old fluorescent lighting with high-efficiency LED light tubes can save up to 75% off energy costs. It also gets ride of the old toxic mercury-filled tubes that induce headaches and would pretty much require a hazmat team if they ever shattered.

LEDs can offer full dimming capabilities, whereas fluorescents are expensive to dim and do so poorly. They also offer directional light (illumination exactly where you need it), whereas fluorescents have multi-directional light that can get lost in unnecessary places. The Energy Focus lights are also flicker-free.The company also manufacturers a variety of specialty commercial LED luminaries.

Energy Focus has been busy lately. During the recent quarter, Energy Focus launched the commercial Intellitube®, the industry's only UL-certified dual-compatibility (Direct-Wire and Direct-Fit) tubular LED ("TLED"). They also shipped the first foreign navy order, including military Intellitube and full fixture LED bunk lights, to the Royal Australian Navy. In addition, the company retrofitted 22 different K-12 school districts for the first half of 2015 and became the exclusive TLED partner of the U.S. Green Building Council's Center for Green Schools. More than doubled manufacturing floor space to accommodate future growth in production and warehousing needs for "Buy American" and "Made in America" productsTheir stock exploded from $5 to nearly $30 from late April to early September, for a gain of roughly 500%.

Then on September 11th, despite shares closing the prior day at $23, the company announced a follow-on offering priced at $17 per share and the stock price proceeded to drop 24% to just under $17. The share price continued dropping towards $14, has a huge spike back above $16 on September 16 and have since slipped back towards $11.

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Disclosure:Disclosure: I own a small number of shares and may increase my position this week. I was not compensated to write this article.I may ...

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Jason Hamlin 4 years ago Author's comment

Stock is up 35% today and has nearly doubled since this article was published! Get our picks before they rally here: