UniPixel (UNXL, $17.18, Buy) Regardless of UniPixel’s after‐hours stock movement, we believe its report was at very worst, in‐line with what we and the Street should have expected, and actually, on several points was quite encouraging.

We’ve seen UNXL make significant strides over the last 3‐4 months, which has now culminated in production orders from its PC partner and two additional orders from new unrelated customers. While the firm is not yet to the point of discussing a definitive revenue contribution, the company has made enough manufacturing progress to earn a full qualification waiver from its PC partner, which will allow initial shipments to begin shortly.

In our opinion, this progress is key to any investment decision and one of our primary reasons for recommending UNXL shares. Over the last few years, the company has done a huge amount of heavy lifting, particularly for a small firm. Technology, IP, products and a manufacturing process had to be developed, while also convincing development, manufacturing, and marketing partners to get behind something new to the industry. Then customers had to be earned and the manufacturing ramp began, which is always harder than anyone anticipates. Today, we believe UNXL is quickly approaching the top of a very long hill. With the final qualification of its plating, inspection and back‐end process, a lot the pieces of the puzzle will finally be in place. Once qualified, start‐to‐finish, the firm has a blueprint for a "copy exact" process that can now be take to Rochester, or any possible Asian sites. At that point, UNXL can begin feeding in the customer relationships it has worked to cultivate over the last couple year. If successful, 2014 should be the year that UNXL proves itself.