Energy Focus (EFOI) Soaring On $23 Million DOD Navy LED Contract, Bottom May Be In

Shares of Energy Focus (EFOI) are soaring about 50% today (but off a low level of just .40/share) on news the company has been awarded a significant contract by the Navy for the continued development of LED lighting on Navy ships.  Working with the Navy isn’t a new venture for EFOI, but the size of this contract is and represents about 65% of the revenues it generated in all of last year.  Previous installments of LED lighting by EFOI were clearly test cases and last night’s news is a clear indication that the Navy stands behind EFOI technology and is ready to replace the legacy lighting on the bulk of its fleet.  The total contract for $23.1 million is for the design and manufacturing of efficient, solid state lighting for general illumination.  No word on how many ships the Navy will upgrade and how many years the contract will cover.  At any rate it’s a big win for EFOI and a testament to their technology and value.

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Technically, this move could very well indicate the bottom is in on a long slide.  I’m a big fan of catching these moves on a pull back and it appears EFOI is pulling back to provide a decent entry point.  I think getting in at .50 or a bit lower provides an outstanding trade entry. 

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