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  • DecisionPoint Systems – Growing With The Mobile Revolution

    The day never ends before one hears of new applications, mostly mobile applications, developed and made available for download either for free or against a nominal charge. However, most of these are for use by the general public and not specifically meant for business processes.

    Business class mobile applications are the subject matter of software developers such as DecisionPoint Systems (NASDAQ:DPSI) that provide specialized and customized enterprise solutions.

    Mobile computing for the field professional

    In the present age of paperless communications, businesses dependent on field workers require efficient field service software solutions for smooth operations and increasing customer satisfaction. The absence this capability means that the business will not be able to derive the maximum benefit that mobile computing is able to provide.

    Field professionals need to carry a hard copy of content with them because they find it difficult to access updated content while they are working in the field. The problem with this is that content keeps changing every minute, which means that mobile workers cannot be sure whether they are carrying the latest information - specifications, inventory status and pricing models. It may even end up in a situation that each field operator is carrying a different version.

    A mobile application for content delivery makes up-to-the-minute content available to field professionals. While there are some off-the-shelf mobile application meant for businesses but it is not one-size-fits-all type of a situation. Businesses have specific requirements and require solutions for their unique needs.

    This is where DecisionPoint Systems comes in.

    DecisionPoint Systems is an Irvine, CA based company that provides customized mobile solutions that allow field professionals to access up-to-the-minute information they need and take decisions based on the findings and transmit data in real time. It is like unlocking the next level of efficiency for closing sales deals and contracts.

    DecisionPoint Systems

    DecisionPoint designs, deploys and supports mobile computing and wireless systems for integrating mobile systems and supply chain systems. It provides products and services to a wide range of industries that includes manufacturing, retail, wholesale and transportation, warehousing and logistics.

    Financial figures of the company for the third quarter and nine months ended September 30, 2013 reveals that the company is moving towards higher margins. Despite year-over-year drop in revenue, the company was able reduce the loss by a significant amount - down from $1.12 million in Q3 2012 to only $390,000 in Q3 2013.

    While revenue declined from $18.57 million to $17.58 million on year-over-year basis, it was $2.85 million more than Q2 FY 2013. The revenue drop was primarily due to lesser sales of high priced units as overall number of units sold in the quarter was more as compared to the same period prior year.

    At the same time, the company maintained a robust order book as revealed by the high number of orders for software and contracts for new software. [http://ir.stockpr.com/decisionpt/sec-filings/content/0001013762-13-000442/0001013762-13-000442.pdf]

    In November 2013, the company raised $3.83 million from a private placement of 383,000 Series E convertible 10% preferred shares through a brokerage firm, Taglich Brothers. Under the agreement, the VP Investment Banking of Taglich Brothers, Robert Schroeder, joined the company's Board of Directors. [http://www.prnewswire.com/news-releases/decisionpoint-systems-announces-completion-of-38-million-convertible-preferred-stock-financing-232044901.html]

    New initiatives

    In early 2013, the company announced a major initiative for expansion into mobile applications, software subscriptions and professional services. The dedicated sales team, Enterprise Solutions Group, was appointed for the purpose of promoting sale of the company's APEXWare software. In pursuance of the objective, the company also expanded its market by developing the software for Android-based devices.

    The coming on board of Mr. Schroeder signals the entry of an experienced financial professional who brings with him the strategies he learned from many years in the brokerage, public accounting industry and as a director in a number of other listed and private companies.

    Conclusion

    Mobile computing has come of age and has opened new vistas for vertical expansion for DecisionPoint. The company has positioned itself as a client-driven provider of mobile wireless and RFID (radio-frequency identification) enterprise solutions with an increased focus on providing service and support oriented solutions.

    With company's becoming increasingly mobile, the demand for mobile enterprise solutions can only increase. Additionally, the company's margins are expected to improve further as it transforms itself from solely a hardware provider to a hardware-cum-service provider.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: DPSI
    Dec 27 1:23 AM | Link | Comment!
  • MEDL Mobile Holdings – The Case Of An App Company In The Dock

    It is my firm belief that when it comes to investing in penny stocks, what is important is whether the company's business model is viable. Using such an approach, I have had returns of over 135% in the last 6 months, as anyone who follows my picks here on SeekingAlpha.com should be able to verify. Finding diamonds in the rough is what I call it.

    The focus of this article is MEDL Mobile Holdings (OTCQB:MEDL), a developer of mobile application software (Apps), which has attracted a fair amount of negative copy from certain quarters that evidently appear to be on a crusade to harm the company.

    This article takes a tour of the company's business model to find out if it is viable and see if the allegations of misleading information - pump and dump - have any credence.

    Negative copy
    There are questions raised about the company's business model, tall claims, dwindling revenue and even about the type and size of the office it maintains. However, the biggest issue centers on aggressive promotion.

    Admittedly, there have been pump and dump type of scenarios before and there is nothing that suggests that such activities will ever cease in future. I, on my part, would rather look more deeply than rely on material that evidently smells of a deliberate attempt to damage reputations. The proof of the pudding, after all, is in eating it.

    Business model
    The company relies primarily on two products: App incubator and Hang/w.

    Let us take the company's flagship product Hang/w first.
    Hang/w is a social media platform - the only mobile app that allows users to broadcast live streaming video to any number of other phones.

    In the last several months, the application has been downloaded by roughly 500,000 people and approximately 1.7 million broadcasts made. It can be argued that it is a free application and has not yet been monetized as yet. It can also be argued that there is no way of confirming the figure as the only information that even I could locate was available on the company website only.

    The fact is that the media doesn't care much to report on micro-cap stocks on its own - information can come only through news releases and company websites. It has to be "your word against mine" type of a situation.

    What we are discussing here is the viability of the business model and growth potential. Most of the times, applications are offered for free to test them in real life situations to be monetized later with advertisements or otherwise after they gain popularity.

    In my opinion, even if we discount the figure by 25% we still have a sizeable number of users. Moreover, I sincerely believe that the company cannot just put the names of the celebrities using the app unless it is sure that it will be vouched for if checked and I am sanguine that celebrities do have a large following.

    The very idea of being able to broadcast live mobile streaming video to celebrities for gaining their attention seems too exciting.

    App incubator

    App incubator is an innovative platform that allows people to post ideas through the app. From the ideas posted by people using the "incubator" app or on company website the company selects the ones that have a potential and develops them on a revenue-sharing basis.
    Over the years, out of the 125,000 ideas submitted by users but the company has developed only a few dozen or 0.02%.

    The allegation is that there are negative ratings given by people who submitted ideas.

    I have also gone through the reviews and ratings. I am forced to believe that most of them come from people whose ideas were not taken forward. A rejection or even a delay sometimes hits hard and manifests as a negative review/rating. However, the number of negative reviews is nothing compared to more than 100,000 people out there who just cannot believe that what they thought was a good business idea is really isn't.

    Dwindling revenue or growing too fast, too quick

    This is one that you cannot hide from the public; it is all there in the SEC filings.

    It pays to keep in mind that even the biggest corporation goes through bad patches due to one reason or the other. In MEDL Mobile Holdings' case it is a case of growing too fast, too quick.

    A quick look at the financial figures reveals that the company's revenues grew from $2.27 million in FY 2011 to $3.39 million in FY 2012, a growth of almost 50%. That is fast, rather too fast. As per the company's own admission, it shifted gear to focus on development of custom applications and to Hang/w, which the management thought had a larger growth potential.

    Other allegations

    There is an allegation of hiring a stock promoter, RedChip, which is fairly well known in the market. Paying a stock promoter to increase the company's visibility is a standard practice and adopted by a large number of companies. It is a statutory requirement to declare the commercial angle of such relationships and RedChip has it right there on its website. The fact that it is in fine print should not be a big issue; nearly everyone, even the large multinationals do that.
    Compared to the type of hype and aggressive promotion smaller companies indulge it (one has simply to search the net to know more about it), MEDL Mobile Holdings' promotional campaign seems like a child's play.

    What's the bottom line?

    The bottom line is that there are always people trying to push a stock price up and an equal number of people trying to pull it down. The Internet is a huge place and a free-for-all platform to air views - favorable or unfavorable, aggressively promotional or intentionally malicious.

    It applies more to penny stocks than to any other class of stocks. In the case of MEDL Mobile Holdings even the issue of the celebrated rapper, 50 Cents becoming an official investor has been raked-up just because one of his previous investment earned him more than $8 million.

    However, it needs to be kept in mind that smaller the company, the bigger the problem with resources. MEDL Mobile Holdings is no exception to that rule. These companies need time to grow.
    At the same time, investing in micro-cap stocks is associated with risks and one needs to be aware of them. As mentioned earlier in the article, the idea is to see if a business model is viable and the gestation period -how much time it will take to benefit from the hidden potential - a year, two, three or even more. That should be the basis of investment in penny stocks and not what vested interests put up on the net.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: MEDL
    Dec 26 1:51 PM | Link | 12 Comments
  • This Junior Miner Is A Good Investment In Gold

    The price of gold has relatively steadied after the price volatility in the first nine months of 2013. Gold price since October is now range bound between $1250 and $1320 per ounce. As outlook for gold heats up as reflected by gold futures, investors are looking at traditional as well as alternative means of investing in gold.

    Investment in a junior mining company engaged in exploration and development of gold properties is one such way of benefiting from the upside expected in gold price. Sacre-Coeur Minerals, Ltd. (CVE: SCM) is one such Canada-based junior mining company that presents an opportunity for investors looking for short as well as long term appreciation expected in gold prices.

    Junior mining companies

    In mining business, after the initial expense by prospectors on looking for veins and quartz and staking claims, a time comes when there is a need of spending a good amount of money - in millions of dollars - to evaluate the extent and the value of a discovery. This is generally done through an organization that can raise venture capital for the purpose of carrying on such activities.

    The focus of these organizations, known as junior mining companies, is not on to build mines or dig gold or minerals but on advancing mines from mere prospects to a position where reserves have been established through certified audits via Canadian government approved 43-101 report. (Since the primary exchanges where such mining venture capital can be raised are located in Canada, most junior mining companies are based in Canada.

    Once approved, the reserves are, in most of the cases, sold to major mining companies engaged in the business of building and running mines.

    Sacre-Coeur Minerals, Ltd.

    Founded in 2004 and based in Vancouver, Canada, Sacre-Coeur Minerals is a junior mining company engaged in exploration, development and also production of gold, metals and diamonds focused on exploration of gold in Guyana.

    The company owns 100% interest in mineral properties (roughly 850 sq. km.) including Million Mountain property north-central Guyana where it is exploring hard-rock gold resources.

    The company raised $804,218 in October 2012 on closure two tranches of its brokered offering announced in September 2012. The offering represented a total of 6,701,819 units at $0.12, with each unit representing one common share and a purchase warrant for one-half of one share of the company. The purchase warrant entitles the holder the right to purchase one common Sacre-Coeur share at $0.18 until October 19, 2014. [http://www.scminerals.com/news/index.php]

    After a series of private placements at $0.15 a share, the company had issued 59,316,433 shares (issued and outstanding), and 70,004,703 shares fully diluted. [http://www.reuters.com/finance/stocks/SCM.V/key-developments/article/2655366 ]

    In February 2013, the company announced the closure of private placement of Gold Participating Bonds for $6,148,000. [http://www.scminerals.com/news/index.php?&content_id=177]

    Investment thesis

    1. Although generally termed as such, Sacre-Coeur is not truly a junior mining company as it is already producing low-cost alluvial gold from near the Million Mountain exploration site with annual revenue running into a few million dollars. One of the reasons that the market is ignoring this is the fact that the company seems to be satisfied posing as a junior miner and prefers not to show the proceeds of gold sales by offsetting them against exploration costs of the Million Mountain Zone 1.
    2. The hard rock reserves in the Million Mountain project is NI 43-101 compliant for 451,397 troy ounces of gold and the company is pretty sanguine that there is scope for 50,000 additional ounces.
    3. Production cost for the Million Mountain property is as low as $450-$500 per ounce, not taking into account royalties, which puts Sacre-Coeur at an advantage over other junior miners in the area with established gold deposits such as Guyana Goldfield (TSE: GUY) (3.5 million oz) and Sandspring's Toroparu (5 million oz).
    4. The economics of the project are strong with NPV of $145.5 million at a discount rate of 5% and annualized effective compounded return rate of 123% [http://www.proactiveinvestors.com/companies/news/44014/sacre-coeur-minerals-constant-work-to-refine-procedures-pays-off-with-low-cash-costs-44014.html ]. This translates into a situation where the company is protected even if the price of gold goes down to as low as $1,000 for an ounce due.
    5. The recent offerings of the company including the Gold Participating Bonds and private placements elicited a positive response and some of them were oversubscribed. The company is thus not only well funded but the oversubscription also reflects investor interest in the potential of the company's current project and future expansion into other Guyana properties.

    Conclusion

    Production of gold from the Million Mountain project should start anytime in 2014, with full capacity operations expected by 2015. Given the exploitation of the full potential of the 43-101 approved reserves with 50% recovery rate and average mine life of seven years, Sacre-Coeur should be valued at $73 million.

    In my opinion, the clobbering that the share price of Sacre-Coeur has been meted out by the market is not justified and actually offers an opportunity for investors looking for an indirect long term investment in gold.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

    Additional disclosure: I am long CVX:SCM.

    Tags: long-ideas
    Dec 16 6:25 AM | Link | Comment!
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