Motricity (MOTR) recently made the headlines and enjoyed a nice 60% rally on news that famed corporate takeover artist Carl Icahn increased his ownership in the mobile advertising company to approximately 32%. With mobile advertising garnering the news of stocks like Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB), it seems Motricity may be finally ready for its turn in the sun.
But the stock has recently retraced that large move off the Icahn news despite posting a profitable quarter. Motricity posted an EPS of 1 cent per share on revenues of $23m. Additionally they posted positive operating cash flow of $1.3m. The trend over the last four quarters of reduced losses and now a profit should not be overlooked. Motricity has been able to turn a profit at its lowest revenue in years right at the beginning of a boom in it mobile advertising. This coupled with the recent $28m infusion from Carl Icahn leaves Motricity in an enviable position going into 2013.
Mobile advertising is becoming the key focus for social media companies right now and will be a big theme in 2013. A simple look at the Yahoo Finance profile for the company reveals why - Motricity empowers mobile operators, brands and advertising agencies to maximize the reach and economic potential of the mobile ecosystem through the delivery of relevance-driven merchandising, marketing and advertising solutions.
Motricity leverages advanced predictive analytics capabilities to deliver the right content, to the right person at the right time. Motricity's unique combination of technology, mobile-expertise and go-to-market approach delivers return-on-investment for our mobile operator, brand and advertising agency customers.
The stock has been in a freefall over the last 18 months falling from $6 to the recent lows at 40c but is has now put in a very nice chart bottom and has begun to move into an uptrend. The 200 day MA at 77c now is the next area of resistance to watch. A break of this will set the stage for a move to the $1+ level. For long term investors at a valuation of $3 per share Motricity would be still considered cheap in comparison to its peers now that they are profitable.
With the successes of Icahn and his recent double down on Motricity we believe traders should pay close attention to this stock. There is much to like with the Motricity story both as a value play into 2013 as well as a play on the explosion in mobile advertising. The future looks very bright for this small cap mobile advertising stock.
Disclosure: I am long MOTR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.