Small Cap UniPixel Inc (UNXL): Light at the End of the Tunnel? GLW, OLED & GTAT

Small cap engineered film stock UniPixel Inc (NASDAQ: UNXL) has not been rewarding investors lately but there are signs of light at the end of the tunnel, meaning its worth taking a closer look at the stock along with the performance of potential peers or benchmarks like Corning Incorporated (NYSE: GLW) and small caps Universal Display Corporation (NASDAQ: OLED) and GT Advanced Technologies Inc (NASDAQ: GTAT).

What is UniPixel Inc?

Small cap UniPixel Inc delivers Performance Engineered Films to the lighting, display and flexible electronics markets under brands that include Clearly Superior™, Diamond Guard™, InTouch Sensors™ and others. UniPixel's high-volume roll-to-roll or continuous flow manufacturing process offers high-fidelity replication of advanced micro-optic structures and surface characteristics over large areas. A key focus for the UniPixel Inc is the development of electronic conductive films for use in electronic sensors for consumer and industrial applications while the company's newly developed Copperhead™ roll-to-roll electronics manufacturing process prints conductive elements on thin film with line widths down to ~ 5um. The company is also marketing its films for touch panel sensor, cover glass replacement, protective cover film, antenna and custom circuitry applications under the UniPixel label, and potentially under private label or Original Equipment Manufacturers (OEM) brands.

As for potential performance benchmarks or peers, large cap Corning Incorporated invents, makes, and sells keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences, but the company is probably most well known for its Gorilla Glass, an alkali-aluminosilicate sheet toughened glass cover for portable electronic; small cap Universal Display Corporation has one of the largest patent portfolios in the organic light emitting diode (OLED) field with licensing rights to over 3000 issued and pending patents worldwide in a broad array of OLED technologies, materials and processes; and small cap GT Advanced Technologies Inc produces advanced materials and innovative crystal growth equipment for the global electronics, solar and LED industries.

What You Need to Know or Be Warned About UniPixel Inc?

UniPixel Inc problems began in May 2013 when shares began plunging on various rumors being spread by the bears or shorts who believe the company is better at promoting products to investors than actually bringing them to market. Moreover, the company competes in a crowded field (click here to see a detailed Barron's article about all of UNXL's problems along with its potential) while in November, shares started plunging once again after a filing to disclose an SEC subpoena:

On November 19, 2013, the Company learned that the Fort Worth Regional Office of the United States Securities and Exchange Commission ("SEC") has issued subpoenas concerning the Company's agreements related to its InTouch Sensors.  The Company intends to cooperate fully with the SEC regarding this non-public, fact-finding inquiry. The SEC has informed the Company that this inquiry should not be construed as an indication that any violations of law have occurred or that the SEC has any negative opinion of any person, entity or security. The Company does not intend to comment further on this matter unless and until this matter is closed or further action is taken by the SEC which, in the Company's judgment, merits further comment or public disclosure.

The resignation of both the CEO and COO followed by analyst downgrades and constantly being labeled as one of the "Nasdaq's 5 Most Hated Stocks" by sites like the Motley Fool have not been helping matters either.

However, there are signs of light at the end of the tunnel for investors. Back in early April, UniPixel Inc and Conductive Inkjet Technology Limited (CIT) agreed to settle their lawsuit with no money exchanging hands and no admissions of any wrong-doing in connection with this dispute. UniPixel Inc further agreed to grant CIT certain limited rights to use technology that would be protected by the patents arising from the disputed patent filings.

Then in mid April, UniPixel Inc appointed flat panel display industry veteran Jeff Hawthorne as chief executive officer, president and director as well as promoted Robert A. Rusenko from vice president of manufacturing to chief operating officer. Hawthorne has already worked as an operational consultant for the company and brings more than 33 years of senior management and advanced technology product development experience, including leading the introduction of innovative, commercially successful products in the flat panel display, manufacturing equipment industry.

In early May, UniPixel Inc reported no revenues verses $5.1 million (due to a $5.0 million payment received by the company's PC OEM licensee) as the company focused on manufacturing process development during the quarter. The net loss was $6.2 million verses net income of $0.9 million while cash and cash equivalents totaled $34.4 million as of March 31, 2014 verses $39.4 million as of the end of 2013. The recently appointed President/CEO:

"During the first quarter, UniPixel made good progress toward overcoming certain challenges necessary to complete the manufacturing process for our flagship touch screen technology, particularly as it relates to ink and printing. A significant focus of our development effort has now turned to the critical process of plating the conductive materials on a roll-to-roll basis… With our new product roadmap and initial product development focus strategy, I am confident that our development team, working closely with Kodak, will overcome in due course the remaining technical hurdles to achieve a reliable, high-volume, roll-to-roll production process for our projected capacitive, multi-touch sensor films. As we've mentioned earlier, we anticipate achieving certain progress milestones in the second quarter of 2014 that will enhance our outlook regarding the exact timing around volume commercial shipments of our touch screens, and we plan to report on these and other product activities as they develop."

Share Performance: UniPixel Inc vs. OLED, GTAT & UNXL

On Monday, small cap UniPixel Inc fell 0.76% to $5.21 (UNXL has a 52 week trading range of $4.80 to $20.83 a share) for a market cap of $64.34 million plus the stock is down 55.8% since the start of the year, down 65.7% over the past year and down 0.76% since December 2010. Here is a look at the long term performance of UniPixel verses that of Corning Incorporated, Universal Display Corporation and GT Advanced Technologies Inc:

As you can see from the above chart, its been a real mixed performance for all four of these stocks.

Finally, here is a look at the latest technical charts for UniPixel Inc, Corning Incorporated, Universal Display Corporation and GT Advanced Technologies Inc:

The Bottom Line. Given that small cap UniPixel anticipates achieving certain progress milestones in the second quarter, investors and traders alike should (at the very least) be keeping an eye on the stock as more good news or signs of progress could send the bears back into hibernation.