Good morning, Folks, and happy Monday,
Stock futures are down slightly this morning with all eyes on the Ukraine-Russia talks at the White House.
Today I’m taking aim at a very nice setup.
💥Go ahead and take a look at Cemtrex Inc (CETX) on your trading platform.
You’ll see the stock had a very solid recovery from its lows in April…
From April 9 to May 19, it ripped 127%.
You’ll notice a big selloff from there, and after some digging, I can’t find any fundamental news that might have led to it. In fact, the company had just reported positive Q2 results on May 15.
CETX is a tiny stock, and my guess is that you had some bigger holders taking profits.
In any case, the stock ramped back up very nicely from late May to early July — more than 60% in a month and a half — far outpacing the markets.
Since then, you can see it has formed a base around the $1.20 to $1.40 range, with buyers consistently stepping in when it flirts with the low side of the range.
It’s coiled tightly right now, and on a tiny stock like this, a breakout could be explosive.
If it moves above $1.50 with volume, a fast move back to $2+ is on the table.
Naturally, nothing is guaranteed here, but I’m watching CETX today to see if we get a move up.
I’m very impressed by this small company, headquartered in Hauppauge, NY with 281 employees as of January.
It operates two main brands: Vicon Industries and Advanced Industrial Services (AIS).
Vicon is a “global leader in advanced security and surveillance technology to safeguard businesses, schools, municipalities, hospitals and cities.”
Vicon leads the company’s security segment, which boasted $30.0 million in revenue in the first 9 months of fiscal 2025 (ending June 30) — up 28% from the first 9 months of fiscal 2024.
The brand has “50+ years in the industry with [a] strong established legacy customer base” and sells 30,000+ cameras annually to places such as hospitals, corrections facilities, courthouses, government buildings, etc.
Some of its offerings include:
Vicon unveiled NEXT in November 2024 and began shipping in Q1 2025. Here is a promotional video explaining the system.
A June 26 press release notes that NEXT has received multiple industry awards, including:
CETX’s other main arm is Advanced Industrial Services, which is a “[p]remier provider of industrial contracting services including millwrighting, rigging, piping, electrical, welding” with 40 years in industry.
CETX says it is a “High repeat business and well-known reputation.”
Its revenue in the first 9 months of fiscal 2025 was $27.9 million — up 11% from the first 9 months of fiscal 2024.
All told, over the first 9 months of fiscal 2025, CETX’s “gross profit increased 27% to $25.24 million, with gross margin improving to 44% from 41%.”
And its “Operating income was $1.69 million, compared to an operating loss of $4.95 million last year.”
On June 12, the company announced a “renewed focus on accelerating operating income growth through targeted acquisitions, following a breakout first half of fiscal 2025.”
CEO Saagar Govil said, “We’ve crossed the profitability threshold, and now we’re going on offense.”
The company said it was “conducting in-depth evaluations on two potential acquisition targets and actively evaluating several others.” If completed, the acquisitions “are expected to contribute an additional $3 to $4 million in annual operating income.”
Some other company news:
In that last press release, CETX noted that “Vicon has grown revenue from $21 million in FY2021 and is on track to exceed $36 million in FY2025, a compound annual growth rate of over 14%.” [emphasis added]
As you do your own research on CETX, be sure to check out this January 2025 investor presentation and the company website.
And of course, always approach your trading in a responsible manner, remembering that trading is very risky. Nothing is ever guaranteed, so never trade with more than you can afford to lose.
Please read the full disclaimer at the bottom of this email as well, so you are aware of additional risks and considerations. Always have a well-thought-out game plan that takes your personal risk tolerance into consideration.
Bottom line: CETX has reported great earnings the past two quarters and has now “crossed the profitability threshold.”
Its stock jumped 60% from May into July and has now formed a solid base.
💥Stay tuned to it today to see if we get a breakout!
To Your Success,
Jeff Bishop
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