Further Signs of an Uptrend in EnSync Inc (NYSEMKT:ESNC)

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Bulls had EnSync Inc (NYSEMKT:ESNC) in their cross hairs on Friday, leading the stock to sharp gains on higher volume.

Shares in EnSync closed Friday at $0.99, up 26.91%, on volume of 1.03 million shares.

Technically, the stock further cemented its gains after its tower reversal on November 7, which we said probably marked the end of the correction that commenced on October 14 from the $1.40 level.

The stock is now positioned well above all the three lines, namely the 20-day, 50-day and 200-day moving averages, and is looking increasingly bullish.

EnSync Inc (NYSEMKT:ESNC) has a mixed first quarter

For its fiscal first quarter Ensync reported EPS of $-0.10, which missed by $0.02, and revenue of $7.7 million, which beat by $0.4 million.

Revenue was up 2466.7% year on year, chiefly due to the sale of multiple power purchase agreements.

“The first quarter of fiscal 2017 was transformational for EnSync and the industry as a whole as we completed the first ever sale of PPA agreements for PV plus storage for the commercial and industrial (C and I) market in a behind the grid setting,” said Brad Hansen, President and Chief Executive Officer. “Our systems design expertise, intellectual property, and innovative business model has positioned us perfectly to take advantage of a market environment driven by a global, national and local shifting of the energy production mix from carbon emitting sources to renewable sources.”

Hansen painted a bullish picture for EnSync for the rest of the year. Highlights include additional closures of PPA projects at lower costs and better pricing for battery and power electronics.

“This confluence of strong demand, decreased costs, and our overall experience sets the stage for improved financial performance on a go forward basis,” he said in the statement.

EnSync Inc (NYSEMKT:ESNC) eyed by Chinese investor

A firm by the name of Melodious Investments Company Limited, which is wholly-owned by Jilun He, a resident of Hong Kong, has accumulated 15,139,000 million shares of EnSync’s common stock. The company also acquired Series C preferred shares potentially convertible into approximately 17 million shares of Ensync’s common stock.

“Shares accumulated by Melodious in excess of 20% of total outstanding shares are only entitled to one-tenth and above on matters requiring shareholder approval such as the election of Company Directors,” said Hansen on a conference call. “In addition under the WBCL since the EnSync Board of Directors did not approve the acquisition of shares by Melodious above the 10% threshold, certain business combination restrictions exist.”

It is not known at this stage whether the Melodious issue is likely to escalate, but the stock looks like it is headed higher.

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