If you jumped into shares of MAIL which I just introduced this past weekend, you are having a very good day.
The stock opened yesterday morning at $7.22, and is currently trading at $7.90 thanks to the predicted strong Q3 earnings release pre open today.
The company announced a 67% increase in revenues of Q3 ’05 to $2.6 million, and a doubling of profits to $600k, or $.06 in EPS. On non-cash expense took the earnings down from $700k.
Just as I stated in the original presentation, this company is rapidly learning to monetize the massive number of eyeballs using their very clever email service through both subscription and advertising revenues.
The stock trading over $7.50 marks the first time this one has traded above its IPO price of $7.50 since last April.
Here’s the current chart as of 7:30 Pacific on earnings day:
Note the breakaway gap I circled on today’s earnings release. While this stock might work higher in the short term, I believe in waiting to see if the gap wants to be filled before taking any further position.
A gap on a chart is like a vacuum in nature- nature abhors a vacuum and wants to fill it. Look for the stock to come back down and fill this gap, at which point it could and should power higher. Of course, it could power higher or enter into a period of extended sideways trading, but I like the odds of a pullback.
This is another example of a dot bomb that Wall Street had shunned turning dot profitable and powering up. PNWIF and CPNE are doing likewise. This seems to be a sweet spot for ideas right now.
One thing is for certain- the trend is strong in this company. Watch for additional anaylst coverage to start to pop up as this company improves. There is only one analyst following the company now.
Comments and questions are welcome.
Editor (Whateveryernameis):
Don’t you think this sucker has fallen outta bed, technically? You waited for it to double before recommending it near a technical peak? While it’s true is has been in a nice uptrend for three months, that uptrend channel has been technically broken to the downside, and MACD sucks.. I am an IncrediMail user and wish I had known about the stock BEFORE the rise, when the MACD was favorable. It doesn’t look very enticing right now. Given that, anything can happen on any given day/week/year to any stock. You said that it would fill the “vacuum” left by the gap up on the 14th, which it did — and then some.
Thomeone bwoke its widdle wegs…(Tweety Bird)
I see on your website that MAIL is not listed in the “Covered Company Compensation Disclosure,” after following the disclaimer link from the Blog entry of the 14th. Have you not been paid to pump this company? It closed today below your $7.12 “Picked” price. Looked like the 14th was the day to sell this one.
Sincerely,
Whatevermynameis
Editor: We don’t have a contract to represent the company. If you read the disclosure, I have simply been a buyer in the stock. Short term with your perfect 20/20 hindsight, your sell point was correct. My published SSL on the stock is $6. You will also note I published a recommendation to not buy the earnings gap, and wait for the stock to settle into the $7.25 range before trading. If you don’t like it, sell it. The earnings surge didn’t hold, but the MACD picture could change in a day with the right news.
new thoughts about MAIL what’s happening?
Editor: It seems this stock responds to numbers, so when they deliver more numbers, it should continue to do well. Be patient is my thought.
While the product is good, recent decisions to start charging for existing features when users update versions will ultimately sink them.
Editor: You could be right. The advertising model when you bring in users has certainly been far more prolific than subscription revenues. If you are concerned, take your 22% profit on the stock and move on. It’s not bad for a few months. I believe I will hang in there for a little while.