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I recently came across a fast growing tech company with an interesting business model (remote subscription based support services). It has rapidly improving financial fundamentals, impressive sales growth and a beneficial owner who is increasing its stake in the firm. It is Support.com (NASDAQ:SPRT).

"Support.com provides online care services for the digital home and small business primarily in North America. Its services and software products install, set up, connect, repair, and protect personal computers and related devices that are essential to its customers; and it offers it as one-time services and subscriptions, and as software products to consumers who prefer do-it-yourself solutions." (Business description from Yahoo Finance)

7 reasons SPRT is a solid speculative play for growth investors at under $3 a share:

  1. A beneficial owner (RGM Capital) has bought some 600,000 shares in the company.
  2. The stock has a solid balance sheet with nearly $50mm in net cash (almost 40% of its market capitalization)
  3. The company has a rapidly improving earnings picture. SPRT lost 26 cents a share in FY2011, should reduce that to a 12 cent a share loss in FY2012 before moving into the black with a 12 cent a share gain in FY2013.
  4. The company is experiencing impressive revenue growth. Analysts project it will grow revenues 34% in FY2012 and north of 25% in FY2013.
  5. Consensus earnings estimates for both FY2012 and FY2013 have gone up nicely over the past two months.
  6. The three analysts that cover the stock have a median price target of $6 a share on the shares (The low target is $4.75, the high is $7 a share).
  7. Given its small market cap ($80mm after taking out the net cash), attractive niche and rapidly growing customer base; it is easy to see this firm becoming a nice bolt on acquisition for a larger tech player.
Source: Beneficial Owner Ups Stake In This Fast Growing $3 Tech Stock