Dr. John L. Faessel
ON THE MARKET
Commentary and Insights
Faessel Publishing LLC
Dr.Faessel@onthemar.com

The efficiencies they offer their clients are “cost savings up to 30% and in some cases more.”

Beacon Enterprise Solutions Group, Inc. (BEAC) $1.65 OTCBB

Update; why the shares of (BEAC) have been on a striking acceleration

Only a few months ago the shares of (BEAC) traded, you might say by appointment only―some days there was no volume at all. But since our first coverage in April of what was a largely unknown and extremely undervalued mini-cap, we are now in a position to report not only positive price acceleration of their shares, but a new and more complete grasp of the compelling and unique character of this company.

So let’s look again and update this story in light of numerous new contracts and add-on contract expansions coming online during these challenging economic times. Indeed today the tally of new contracts for (BEAC) increased once again.*

(BEAC)’s management has discovered what could accurately be described as a counter-cyclical or recession-proof business model. From a May 5th letter to shareholders by Chairman and CEO of Beacon, Bruce Widener, comes the following treasure of intelligence:

“When considering (BEAC) shares from an investment perspective, Beacon has found that our considerable growth in new opportunities in the telecom and infrastructure services sector has resulted from what could accurately be described as a counter-cyclical or recession-proof business model. Management expects these forecasts (see below) will be positively impacted by the integration of further business and new contract wins over the next two years. While Beacon’s growth to date has been impressive, the future looks outstanding.”

Anchoring this upbeat appraisal, (BEAC) recently announced research coverage by Murphy Analytics:

“Mr. Murphy expects Beacon will deliver net income in line with management’s previously announced projections and initiates coverage with a 12-month price target of $3.60 per share.”

“For its fiscal 2009 (BEAC) expects that recently announced multi-year service contracts may push revenues to over $16 million, an increase of 170% over fiscal 2008. With predictability somewhat higher looking out over a longer time horizon, (BEAC) expects revenue within a range of $32.1 million to $47.5 million for fiscal 2010.”

*For a copy of the Murphy Analytics research coverage on (BEAC) that is more expansive than space allows send an email request: Dr.Faessel@onthemar.com

(BEAC) is still a relatively tiny and undiscovered company with a market cap of only $28 million. The efficiencies they offer their clients are “cost savings up to 30% and in some cases more.” The (BEAC) team has a well established history of building successful public companies with over 160 years of combined regional, national, and international industry experience; their executive team members have been builders of national companies generating over $900 million in annual revenues, and have raised over $300 million in capital.

* Today the tally of new contracts for (BEAC) increased once again, with a significant addition to their extraordinary recent major contract wins and references to “more where that came from.” Taking a closer look, the announced contract with one of the world’s largest pharmaceutical and consumer health products Fortune 500 companies is another important add-on expansion of a previous agreement with this “major” to provide single source, end-to-end IT solutions as it adds new highly-sophisticated IT infrastructure projects. It will service the entity’s facilities located throughout the United States, Germany, Spain, Italy, France, Canada, Australia, the Netherlands and the UK.

And of note, on 6/30/2009 (BEAC) announced that three (3) new customers were expected to bring approximately $2.1 million in new revenue over the next twelve months. On 5/29/2009 five (5) more engagements were announced. And on 5/21/2009 they were awarded a 3-year contract and named exclusive IT supplier to a Department of Defense contractor as part of a $500 million contract.

It is stating the obvious to observe that (BEAC)’s management is performing well, as demonstrated by a seemingly endless string of service agreements with mid-size businesses and some of the largest companies in the world. This is another clear validation of their business model.

With these developments in mind, I believe that the (BEAC) story is worthy of close consideration and that the shares of this undiscovered jewel could have lots of upside.

Visit (BEAC)’s web site that includes press releases, informative web casts, financial data, and comprehensive investor presentations: http://www.askbeacon.com