Millions of Americans are going mobile with their Internet
access. We're increasingly relying on mobile devices for all sorts
of activities, but growth in Internet access is downright
Last spring, a survey by the Pew Internet and American Life
Center found that 40 percent of adults used their mobile phones to
access the Internet, e-mail or instant messaging. This represents
an 8 percent increase over the prior year.
Another Pew survey found that before the November midterm
elections more than a quarter of adult Americans used a cell phone
to find out about, or participate in, the campaign,
In early November I briefly discussed
Motricity (Nasdaq: MOTR)
, one of the hottest IPO stocks of 2010. The company provides
mobile solutions for the wireless market.
Early after its IPO
Motricity (Nasdaq: MOTR)
tripled from its IPO price of $10. It rallied to over $30 then fell
fast and hard to $18. I chalk up the volatility to a young stock
that offered some extremely attractive profit-taking opportunities
for early investors.
Still, the stock finished 2010 with an 86 percent increase, not
too bad at all.
Motricity went public in June, but the company actually began a
decade ago. It has a long track record offering wireless carriers
and enterprises the hosting services needed to deliver mobile data.
Over the last ten years it has been able to refine its business
model several times to pursue opportunities in a rapidly evolving
Motricity is now well-positioned to take advantage of that
sometimes esoteric concept of "cloud computing," and it is branding
itself as a cloud-based, mobile-as-a-service company.
Content is king, especially for mobile activities. Motricity has
you covered, whether you're using Apple's
iPhone, a BlackBerry from
Research In Motion (Nasdaq: RIMM)
or an Android-powered device.
The company's services work over networks from
Verizon Wireless (
), Sprint (
T-Mobile USA (
. All four carriers are customers, as are content giants CNN,
Showtime, the History Channel and the Home Shopping Network (full
disclosure: I currently own shares of Apple and Verizon in my
So if you have a cell phone from one of the above carriers you
probably already use this company's technology. The question is:
should you own their stock?
Let's look at some of the numbers...
Motricity says that in the past five years, its carrier
customers have generated more than 60 billion page views and $2.7
billion in gross revenue from the sale of mobile content and
It attributes much of the business to its anchor mCore Platform.
More than 13,000 different mobile phones can access the wireless
data services - 75 million pieces of third-party content and
applications - are available to some 400 million wireless
Motricity is expanding beyond the U.S. market to reach Europe,
Asia, India and Latin America. The company's 2009 revenue grew to
$113 million, from $35 million in 2007.
While Motricity has yet to post an annual operating profit
analysts remain bullish on the company's potential. The consensus
analyst estimate is for Motricity to earn $0.13 per diluted share
for the last three months of 2010, and to earn $0.38 for the full
year. In 2011, analysts expect 110 percent earnings growth, to
$0.80 per share.
Despite share price volatility, 5 of 7 analysts surveyed by
Thomson Reuters remain steadfast in rating Motricity a buy. The
consensus 12-month price target is $24. JPMorgan analyst Sterling
Auty wrote in November that
"...this is the best stock in our coverage to capture mobile
With a forward P/E of 25, the tech stock is a little rich so
look to buy on dips under $20 if you're interested.
As a final note, the price of silver has dipped recently and
opened the window of opportunity for two silver stocks that I cover
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