Leading edge technology offers an amazing investing opportunity to those with the foresight to catch the trend and ride the wave to triple (and sometimes even quadruple) digit gains. In the past, those with this foresight invested heavily in Netscape (browser), AOL (dial up), Broadcast.com (video) and Google (NASDAQ:GOOG) (search engine) and came out as millionaire investors. While others with a lack of knowledge were shorting these stocks, the pioneers had the vision to see that these companies were going to change the way the world works.
The mobile imaging market is being driven by irreversible trends. Most of the phones being sold today are smartphones that have sophisticated cameras. The pixel clarity improves with each new generation. As the mobile camera improves, the capture rate of data improves. One company stands poised to storm the market and capitalize on this technology.
Mitek Systems' (NASDAQ:MITK) Remote Deposit Capture is able to record pictures of checks and accurately deposit them in a bank or brokerage account. MITK has signed up 408 banks including BOA (NYSE:BAC), Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), Schwab (NYSE:SCHW) and Fidelity. To date, 137 clients have successfully implemented the technology.
The generational improvement in smartphone cameras is quickly allowing mobile imaging to enter additional markets. The possibilities are unlimited and go so far beyond simply depositing checks. Mitek has already developed an application for paying bills. With this application and one click, you will be able to pay bills from your smartphone. Mitek has developed an application being used by Progressive Insurance (NYSE:PGR) where you take a picture of your drivers license and they can give you a quote on your insurance. In the future, we see smartphone applications for pharmacy forms, medical records…well, you get the picture.
I would like to share some bullet points with you to make your research on MITK easier. There are irreversible trends in technology today that should make MITK mobile imaging technology the industry standard in many markets. Early adoption is already underway.
- The Independent market research firm AlixPartners has published a mobile banking report funded by Visa favorable to Mitek Systems.
- The research report published by AlixPartners calls for 1.5 billion mobile deposits by 2014.
- According to the market research published by AlixPartners, the transactional cost of a deposit is cut from $1.50 per transaction to a dime when using mobile check deposit.
- Mitek Systems has an application to take a picture of your drivers license and get an insurance quote.
- Mitek Systems has $15 million in the bank, alleviating the need for additional financing.
- Mitek Systems' Bill Pay (pdf) was named best of show at Finovat Spring 2011.
- Mitek Systems has developed a point and shoot application to transfer credit card balances to springboard into new markets.
- Mitek Systems has a proven and experienced management team.
- Mitek Systems has partnered with industry leading banks to propel its growth to the stratosphere.
- The current short position in MITK is 6.34 million shares and growing; large short positions can be quite difficult to cover, often resulting in a short squeeze when market conditions turn.
- Please go to the Mitek Systems website for additional information.
Shorts often win
Professional short sellers usually benefit from the enormous capital requirements companies need to bring their technologies to market. The need to finance operations often lets short sellers cover their position, even if they (the shorts) are completely wrong.
A lot of capital and willingness to blindly short millions of shares can be enough to destroy many publicly traded companies. However, it can be an investment disaster to recklessly short stocks of ground breaking technologies that alter the way we carry out our day to day transactions.
Its not often you get a chance to buy a leading edge technology at a reasonable valuation. The lawsuit with USAA temporarily confused the market and shaved $200 million off the valuation of Mitek Systems. It is my belief that Mitek is today no longer an idea waiting for a market but a proven technology well on its way toward becoming an industry standard. With at least 10 more applications perfect for video capture Mitek Systems is well on its way to becoming a transformative technology.
Disclosure: I am long MITK.