When many people think of investing in the mobile market, they likely think of tech giants like Apple , Samsung , and Google . However, these companies are so large they're unlikely to double anytime soon.
Therefore, more growth-oriented investors should look for smaller companies with more room to grow. Let's take a look at three up-and-coming stocks in the mobile market -- Energous , Glu Mobile , and LeapFrog -- that investors should keep an eye on.
Energous: An investment in wireless charging
Many new smartphones, like Samsung's Galaxy S6, can be charged wirelessly.
Big companies like Duracell, which P&G is selling to Berkshire Hathaway , sell various wireless charging solutions. China smartphone maker ZTE plans to invest $560 million in wireless charging solutions for vehicles over the next two years. Research company Markets and Markets estimates that the entire wireless charging market will grow at a CAGR of 60% between 2014 to 2020 to $13.8 billion.
Energous is a tiny company in this rapidly growing market. The company is developing a technology, known as WattUpa, that can charge devices at a distance instead of using stationary charging pads. According to the company, its prototype devices can charge devices at distances of up to 15 feet. This technology would potentially not only change how people charge mobile devices, but also completely eliminate the tangle of wires behind desktop computers and entertainment systems.
Kim Kardashian: Hollywood
It's tempting to compare Glu to Zynga and King Digital Entertainment . However, Glu's revenue growth easily tops both larger rivals. Last quarter, Glu's revenue rose 109% annually to $72.9 million in the fourth quarter of 2014. By comparison, Zynga's revenue rose 9% annually last quarter, while Glu's revenue fell 7%. Unlike Zynga, Glu is profitable -- it reported net income of $1.4 million -- up from a net loss of $3.5 million a year earlier.
LeapFrog: A contrarian play on kid's tablets and wearables
Shares of LeapFrog plunged nearly 70% over the past year due to slumping sales of its kid-friendly tablets. Protective cases for iPads and sturdier Amazon Kindle tablets for children quickly turned LeapFrog's LeapPad tablets from cutting edge toys to outdated niche devices.
Last quarter, LeapFrog's net sales fell 23% year over year, and it posted a net loss of $124 million, down from a profit of $64 million a year earlier. However, LeapFrog stock is also extremely cheap. The stock currently trades just 2 times trailing earnings, and just over half of its book value. In other words, any minor signs of a turnaround could quickly boost its stock price.
LeapFrog's LeapPad 3. Source: LeapFrog.
LeapFrog recently entered the wearables market with the LeapBand, a cheap fitness band with interactive games for children. It encourages kids to stay active and fills a niche market that mainstream fitness band makers like FitBit and Jawbone have ignored. It will also launch LeapTV, a motion-controled gaming console, later this year.
I don't think investors should invest in LeapFrog unless those new products generate meaningful revenues, but they should still keep an eye on the stock.
The final takeaway
Energous, Glu Mobile, and LeapFrog are all highly speculative bets on the mobile market. However, these under-the-radar stocks are still worth researching since they offer much more downside and upside potential than the larger players in the market.
This $19 trillion industry could destroy the Internet
One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism... The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Don't be too late to the party -- click here for one stock to own when the Web goes dark.
The article Mobile Tech: 3 Up-and-Coming Stocks to Watch originally appeared on Fool.com.
Leo Sun owns shares of Apple. The Motley Fool recommends Amazon.com, Apple, Google (A shares), Google (C shares), and Procter & Gamble. The Motley Fool owns shares of Amazon.com, Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.