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Incredimail
(NASDAQ SC: MAIL): Revenue Streams Coming On Line |
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Occasionally I get an idea that falls
into the category of "hot tip". Being a serial investor and stock market
junkie, I often act by picking up a small position before I understand
the company's fundamentals and upside potential. As I learn more and watch
the stock trade, I will often add to the position over time, always with
a profit objective in mind.
Incredimail falls in the hot
tip category- compliments of a hedge fund manager friend. I have been adding
to the position since picking up the first 2,000 shares at $6.645. I now
own 5300 shares at $6.92, and will probably add to the position on Monday
morning. I am led to believe the company is doing better than anyone understands,
and earnings for Q3 will be out Tuesday morning before the bell.
Incredimail designs and markets
an integrated suite of customized and entertaining email software products
for the consumer or home user markets. The company is a global leader in
enriching email interactions by offering users the ability to design highly
personalized email presentations. They have a large collection of multimedia
content for email communication.
You can go to their web site at www.incredimail.com
and use their suite of products. You can send emails and evites with a
combination of funny images, audio, and animation.
Incredimail has been around
for a few years, but the company is just starting to learn how to monetize
its popular suite of email platforms. Here are some big numbers MAIL
boasts:
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Since inception, there have been 63
million registered users
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They currently have 10 million
active users
-
Incredimail sends about 300 million
emails per month
The company generates revenues through
licensing fees, software sales, and advertising, which is where they are
really getting some traction at the present time. Last quarter the company
eclipsed the $2 million mark in revenues for the very first time, and is
currently growing at about a 25% annual growth rate.
Magnetic- their recent product
introduction, has taken off in a big way. Magnetic is a multimedia
library that allows users to transform their own digital images into all
kinds of crazy 3D screen savers and wall papers. In the first six months
since introduction, Magnetic attracted 1 million downloads.
Mail has been trading up beautifully
since the end of July, but don't be misled by the chart. Yes- it has come
off an oversold bottom, but MAIL came public at the end of January
2006 at $7.50 per share. The stock traded up to $9 in
short order, and was all downhill until July. This is just the beginning
of its turn around phase. You can still own it under the IPO price.
Recently MAIL has engaged
in several partnering relationships- Yahoo! (NASDAQ: YHOO) being
the most notable.
This is another of many given up
for dead in the ecommerce space that should prove out their business model
over the longer term. The large caps in the ecommerce space- Yahoo!, Amazon,
and eBay were all written off for dead at one time.
Look for renewed enthusiasm for
MAIL when Q3 numbers come out. This company is doing much better than
the market understands now. There is only one analyst covering the stock,
and that should change in the near future.
Mail has less than 10 million
shares Issued and Outstanding- a mere $70 million market cap at $7.
Look for a double in this stock over the next 3 to 6 months.
One challenge- despite being a NASDAQ
Small Cap stock, it is fairly illiquid. It is also difficult to buy. Post
a limit order and have some patience. However, if you want to own it before
earnings come out on Tuesday morning, you might have to pay up a little.
It only trades 20,000 to 30,000 shares per day.
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Titan
Global (OTC BB: TTGL) Continues Housecleaning |
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On Friday, after the market closed,
Titan
Global delivered another piece of the profit picture as the company
disclosed it had reached an "agreement in principle" to refinance debt.
The debt refinancing includes about
$8 million in notes and a $15 million revolving line of credit. Here's
what I love about this arrangement- according to the press release, once
this arrangement closes a previous financier will forfeit 1.25 million
shares that could have found their way into the open market and
held the price down.
TTGL Global is moving rapidly
to clean up its capital structure, and position the stock for appreciation.
When volume materializes it looks as if the market will not wrestle with
much excess supply.
This is a very simple situation,
and I can summarize very succinctly. If you believe this company can execute
the strategies it has laid out over the past month through its news releases
and conference call, there is no way this stock will be trading at
a mere $45 million market valuation with $140 million in annual revenues
and north of $10 million in profits.
You can take the risk now and own
it while remains dramatically undervalued, or you can wait for some of
the promised results to be in the rear view mirror, and probably pay a
lot more for the stock.
If this company delivers, this is
a slam dunk for $3 in 2007. I keep thinking about the 30
million international long distance cards they sell annually- that's a
whopper of a number. Make a little profit, and the market will be
all over this one.
Click
Here to read Friday's press release.
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