To OTC Journal Members:
 
 

Right Place, Right Time - Poynt Is On the Smart Side of the Smartphone Business

There's a technology revolution unfolding right before our eyes, and it's serving up great investment opportunities as a result. Funny thing though... the best way to tap this budding trend isn't the way many investors suspect. Rather, the biggest upside in this business lies in the part of it that's almost too obvious to be noticed. 

Own a smartphone? If you don't yet, odds are pretty good you will by the year 2015. The devices are not only selling like crazy, but sales are accelerating. Over the next five years, experts believe more than 2 billion smartphones will be purchased, with more being bought in the last year of that five-year span than in the first year. Translation: Nearly 1/3 of the globe's entire population will own one soon. That's huge.

Thus far the preferred ways to play this surging growth have been Apple (AAPL), with its indisputably-cool iPhone, or relative newcomer Google (GOOG), which shook the industry up when it anviled Android a few months back. And let's not forget Research in Motion (RIMM), which actually pioneered the smartphone era with its Blackberry. 

There's a nagging flaw with each of their business models however - there's little opportunity for reliable recurring revenue, as the more smartphones that are sold, the smaller the potential market gets. Even 'app' sales (apps, or applications, are the programs that you can operate on smartphone) can be hot and cold. 

Enter Poynt Corporation (PYN), a Canadian-listed small cap that U.S. investors should have no problem getting on board, though it may require a call to your broker to actually own it. [The 'PYN' ticker actually represents a different equity on U.S. exchanges.] 

Poynt Corporation is positioned where the healthy smartphone gravy/money is... in revenue bearing applications supported not by smartphone users, but by localized advertisers looking to promote their business to the growing number of smartphone users utilizing their phones to find those geographically-nearby businesses.

Brilliant in its simplicity? Yes, but before you kick yourself and ask "Why didn't I think of that?", take a few minutes to learn about the company. See, just because you didn't think of the idea doesn't mean you can't benefit from it as an investor. 
 

Overview

Though you may not have heard of Location-Based Search, or LBS, you may have already participated in it without even realizing it. In simplest terms, internet service providers and smartphones can feed you targeted banner ads and text ads over the web or your smartphone based on your geographical location. The aim is to show you where local restaurants are, gas prices at nearby filling stations, when movies start at the theatre down the street, etc. It's just a way to better serve users/browsers, as well as offer a better bang for marketer's bucks. That's the whole point of LBS.

It's no nickel and dime business either. In fact, the location-based search business is growing even faster than smartphone proliferation. Location-based search generated $480 million in revenue in 2008, but is forecasted to generate $3 billion in annual sales by 2013.

Those geographically based advertisements don't just magically show up though. It takes technology to make it work, and it bears revenue for the organization that can build and manage that technology. That's Poynt.

And let me make one thing very clear for investors... Poynt is very good at what they do. 

It's app is an award-winning program, it's THE number one 'Local Search and Recommend' for the BlackBerry, and it's a top-ten local-search application for the iPhone. It's recently-launched Android app for the same category is likely to achieve the same popularity. In fact, the Poynt application was the one app featured in a recent television advertisement from Research in Motion, driving yesterday's wild ride higher. Indeed, the fact that PYN went nuts on just a mere premise should tell you something about the undertow here.

It's the revenue model, however, that should get investors most excited.
 

Making Money

The application is free for smartphone users to download and install. It's the local advertisers that actually pay Poynt Corporation for the right to post detailed and locale-specific ads via the local ad network.

How's it work? On average, an active Poynt user conducts 14 queries per month, and these queries generate revenue for Poynt Corporation. See, Poynt gets gets paid for page views. When a user lays eyes on one of the individual screens seen while using the service, or when they click on an ad, that puts money in Poynt's pocket. It may only be pennies as at time, but with the numbers of smartphone owners growing like wildfire...

More important to investors, this advertiser-supported model works very well. A recent mobile ad campaign undertaken by the Days Inn hotel chain was reported to have generated $2 in revenue for every $1 spent (which is a huge ROI for interned-based advertising). Though the details of Poynt's side of such deals are not disclosed, that's not even the point (no pun intended). The point is, the power of this focused advertising is proving itself. Accordingly, we've seen a steady increase in Poynt's top line over the last year or so.

In the third quarter, year-over-year sales swelled by more than 100%, growing from $105K a year earlier to $236K. On a nine-month basis, comparable revenues are higher by 172% in 2010. One thing is clear about these numbers: growth is tremendous.

Here's the thing... Poynt is just getting started down this growth track.

On the other hand, investors have already started to figure out just how big the PYN opportunity is, if the trading action over the last two months is any indication. Since early December we've seen PYN rally from $0.05 to as high as $0.14 topped off by yesterday's burst. And why not? Triple-digit increases in sales are more than a little exciting.

Point being, investors can't tarry here. If you want to maximize the upside that's starting to unfold here, you need to get in soon - as in today - since this thing could turn into a bullish monster before anybody realizes what's going on. 

And as if it needed it, the company put the icing on the cake this morning with its latest technology acquisition.
 

The Final Bullish Straw

As of right now, Poynt Corporation owns some great technology from go2 Media Inc. The acquisition, as CEO Andrew Osis described in the press release "...provides us the opportunity to expand our business from an App with publishing capabilities into an ad publishing platform with the ability to publish to multiple mobile applications." 

In other words, not only is the company driving more and more revenue through mobile local search, it's now going to drive revenue by opening the service up to more venues. The press release is below, along with some information about an investor conference call; I suggest you listen in, whether you're prompted to be an owner right now or not. 

The conference call, the technology from go2 Media, and even the splash that yesterday's BlackBerry commercial clearly made with the stock, however, are secondary to to the bigger picture here - the fact Poynt Corporation is in the right place at the right time.

The total market cap for Poynt is a mere $50 million... a drop in the bucket compared to the $3.0 billion market LBS should be by 2013, and not even a drop in the bucket in comparison to the $55 billion that's expected to be spent on interactive marketing like this in 2014. Point being, a very small investment today could grow significantly in pretty short order, but you've got to pull he trigger.

Here's the press release, and don't forget to contact your broker to specify that the PYN you want is the Canadian-listed company called Poynt Corporation.