Boingo Wireless (WIFI)

[Flobewan]

1. Boingo Wireless (Nasdaq: WIFI)
At first glance, this business model held little appeal to me. The provider of Wi-Fi "hot-spots" at more than 300,000 locations would seem to be doomed by the advent of all-you-can-eat data plans from wireless service providers.

But recent news that Verizon (NYSE: VZ) wants to cap its users' data usage -- a move likely be copied by rivals -- puts Boingo back in play. You could now argue that consumers will be better off subscribing to Boingo's plans in places such as airports to avoid racking up the dreaded overage charges on their wireless bills. This may explain why shares have moved up 20% since bottoming out a month ago.

Despite the upward move, this is still a very cheap stock, trading at around six times projected 2011 earnings before interest, taxes, depreciation and amortization (EBITDA). The charm of this business model is that management can ratchet spending up or down according to need and cash flow. If demand is strong, then look for many more hot-spots to be added. If demand cools, then look for the company to hold off expanding, and instead squeeze more cash flow out of each existing hot-spot. Shares, recently trading at $9.50, could move up into the mid-teens according to analysts who recently initiated coverage.

Link

http://seekingalpha.com/article/279157-3-recent-ipos-that-could-soar-in-coming-months?source=yahoo