$10 Million in Contracts in Five Months Has IT Company Hitting Investors Radar

$10 Million in Contracts in Five Months Has IT Company Hitting Investors Radar

By: AllPennyStocks.com News

Tuesday, November 8, 2011

With the ongoing shift to a digital world, Information Technology (IT) solutions continues to be a blossoming industry. In its infancy by no stretch of the imagination, the nascent field has immeasurable growth potential in the future. Those investors that have tracked Beacon Enterprise Solutions Group, Inc. (OTCBB:BEAC) are witnessing the possibilities for an established firm that is really now starting to get some traction. Running in the same industry as giants such as Cisco Systems (NASDAQ:CSCO) and Juniper Networks (NYSE:JNPR), Beacon has been managing to snare some more substantial market share as things have definitely been heating up for the company in the last five months. Emerging as a global leader in the design, implementation and management of high performance Information Technology Systems (ITS) infrastructure solutions, contracts started rolling-in with the penning of deals in June with a Fortune 50 biotechnology firm. Additionally, two agreements with ICS Nett, Inc., a Washington, DC-based federal prime contractor, were reported in August opening the door for vertical growth in the space for Beacon. ICS has been contracted as part of programs with budgets in excess of $75 billion for which Beacon’s services are expected to be needed.

That new relationship immediately proved fruitful for Beacon with a near immediate announcement to provide ITS infrastructure services to the Washington Metropolitan Area Transit Authority (WMATA)'s Red Metro Line through its connection with ICS. The contract carried a hefty $4 million valuation for Beacon. Beacon President and COO Jerry Bowman explained, "The relationship with ICS is allowing Beacon to expand the verticals to which we offer our core services, and will help stabilize our net sales volume which has been somewhat unpredictable the last couple of quarters. Providing Rail Telecom services to ICS Transportation Division is a very solid strategic move for Beacon."

Beacon’s existing Fortune 50 pharmaceutical client came back for more with a new half-million-dollar contract in September for a fiber optic project. Less than a month later, another $1.33 million fiber optic contract was signed with the biotech company. Given the influx of sales, it should not have been a big surprise when Beacon reported that for the period ending September 30, 2011, it expects to top the year prior’s quarter sales of $14 million by more than 30 percent with a gross profit margin between 35 and 40 percent.

Today, the news stream maintained with the announcement of the signing of a new contract with an existing Fortune 50 pharmaceutical client to implement a previously awarded project in which Beacon performed design, assessment and engineering work at the client’s facilities throughout the world over the summer. The latest contract, which is valued at $730,000, pushes the total value of contracts from the client to nearly $3.5 million in the past five months.

Shareholders didn’t seem to be particularly jazzed about the news today as shares slid mildly by 1.79 percent at $0.275. What is encouraging, however, is the fact that shares of BEAC have risen from lows of 14 cents in the past four months and could be identifying a bottom for the value of a share. A thinly-traded stock with only 37.45 million shares outstanding, Beacon is still only sporting a market cap in the area of $10 million. Sales are accelerating and could wend way for future increases in share price, which may catch the attention of more investors as the new year approaches. Proper due diligence is, as always, encouraged.

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