ChangeWaves Tobin Smith put this out today,He's talking about MOBL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
August 29, 2006
Fellow Investor,
In the land of microcaps, meltdowns – as well as melt-ups – in the stock price come with some regularity.
After all, these are thinly-traded tiny companies that the hedge funds can move around in a hurry.
Our job at ChangeWave MicroCap Investor, when a meltdown happens in one of our stocks, is to determine if...
a) There was a huge fundamental problem brewing that we overlooked; or
b) The train is still on the track and the stock has now become an insanely good buy.
Well, in the case of this revolutionary player in the wireless broadband market, the stock is an insanely GREAT buy.
I’ll give you the highlights here. Get the full details on how to ride this 14 cent stock to 2 bucks or better with a no-risk trial subscription to ChangeWave MicroCap Investor.
Back to basics
When we get a temporary meltdown like this, it’s always “back to basics.”
First, we revisit our premise for investing in the first place – do we still believe in the story?
Well, on reflection, yes we absolutely do.
This company operates at the nexus of the wireless and broadband telecom ChangeWaves with visionary management, plus a capital structure focused on high cash flow – essential for young companies that hope to hit it big someday.
It’s critically important to realize how the game has changed in telecom.
In this new era, “convergence” is the magic word. Cable, wireless, old-telecom and ISP businesses are converging at a lightning pace. Notably, three major trends have emerged on which this company has launched its business strategy:
1) The movement toward broadband;
2) The movement toward wireless; and
3) The movement toward Internet Protocol-enabled networks – breaking down any distinction between voice, video and data.
In the highly-competitive chase for the big bucks of the 21st century, bundled services have become the name of the game.
So yes, once again we love the space and its fortune-building potential.
Second, we evaluate the company’s progress on reaching its goals. And here, there’s a lot to like.
Earlier this year, the company announced that its WazTempe wireless broadband network in Tempe, Ariz., continues to add paying subscribers, with April's gross revenue up 27% over March. And in July, they said that paid usage had risen for the 5th consecutive month.
Here’s the beauty of their model: They have one central network operating hub that can manage thousands of local Wi-Fi networks – so it’s very scalable.
What's more, when the new Intel mobile WiMAX chip is in enough laptop computers to reach critical mass, we’ll undoubtedly see an even bigger migration to wireless broadband – both for the convenience and the 5 to10 megabits of broadband speed.
And this little company is sitting in exactly the right spot to benefit in a big, big way.
It already has a stranglehold on Arizona cities, but we expect to see dozens of other venues added, because the Kite Network – which they recently acquired -- is strong in the North, South and the Midwest.
The company is on target for $1 billion in top-line revenue, their CEO’s stated goal – I’m betting they’ll succeed and make us a fortune in the process.
Here are a few highlights from this firm’s recent quarterly report:
Revenue was $99 million, up 113% year-over-year.
Gross profit was $50 million, up 108%.
EBITDA (before minority interest), normalized for one-time charges related to litigation, goodwill impairment and restructuring, was $3.4 million, up almost $5 million from a negative $1.5 million in the prior fiscal year.
Excluding non-recurring charges, net loss improved to $3.8 million from $5.4 million.
No big surprises. Just the growth we expect to see.
That’s why everything we’ve looked at has confirmed our view that the stock is a steal at these prices.
At around 15 cents as I write, you can lock up a lot of shares – and wealth-building potential – with just a small investment now.
Click here to try ChangeWave MicroCap Investor without risk now.
So what ails the stock price?
With a little more digging, I think we’ve come up with the answer.
It looks like disgruntled hedgies and other big investors bailed – temporarily – for two reasons.
1. The company restructured their $15 million convertible bond note.
What’s funny is the new terms are better in terms of flexibility and payment options. But many of the big guys sell and ask questions later when it comes to any debt restructuring.
2. Plain old investor fatigue also played a part.
The really big money has very little patience. And the company is running a little behind in its plans for new major investment and a listing on a major exchange. So the hedgies bolted.
But fundamentally, this company’s businesses are doing very well, and their upside prospects, especially in wireless broadband, are as big as ever. By comparing this firm's market value (less than $70 million) to other players in wireless broadband, you can easily see that its shares are a raging bargain.
A great comparison is Clearwire, the wireless internet firm that recently raised more than $1 billion ($900 million of it from Intel and Motorola). Not bad for a company that lost $140 million last year on one-third of the revenues of this company – man, that is un-freakin'-believable!
So once again, we’ve taken another hard look at the stock, and I’ll tell anyone who wants to listen that it’s a raging buy.
Get access to everything we’ve written about this company online immediately, by accepting your no-risk subscription to MicroCap Investor now.
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You’re going to love ChangeWave MicroCap Investor, or I’ll give you all your money back.
Take a full 90 days to evaluate the service. If you decide – for whatever reason – that it’s not for you, just cancel anytime in that period, even on the very last day, and I’ll refund every penny of your subscription cost.
Click here now.
Swinging for the fences,
Toby Smith, Editor
ChangeWave MicroCap Investor
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