$SMSI / SMSI / Smith Micro Software Inc / Stock trades at $2.42 a Share on the NASDAQ / LONG
Bullish Case for SMSI
- On Thursday 3/6 after the market close, SMSI had their positive earnings announcement which caused the stock to gap up pre market followed by a morning spike right at the open the next day from $1.84 to $2.40's
- In the earnings announcement they beat on revenue and had a smaller loss than people expected
- Positive Earnings Announcement 3/6/2014 : seekingalpha.com/pr/9192883-smith-micro-...
- Speculation on whether Applied Materials or Intel had a Partnership Agreement with SMSI which turns out its Intel that has bigger profits and revenue growth
- Introduced their Com Suite Mobile Messaging App (add on for phone carriers which had Partnership with Sprint) Platform in a few weeks in Q2 2014
- SMSI provides HUGE monetization route for phone carriers like Sprint to make money off of users sending large files like photos and videos which cost money to do since it takes up a lot of bandwidth
- In their Conference Call Transcript about their Earnings Statement mention the face that users are now able to take advantage of the Com Suite without downloading any app and there's going to be add on for consumers which SMSI will split the revenues from the Add On from the consumer (that can buy mini Avatars etc) with the phone operators. Also they mentioned that Twitter, which has their App called Vine, introduced Stickers where you can put little things on your video which did $18 Million in revenue last year
- This is their first product of many
- Technical Analysis tells you that the stock broke out of couple resistance levels at $1.90 and $2.20 so this stock had the ability to break out which is a Break Out Stock. The next resistance level dates back to 2012 at $2.75. If this stock was able to Break Out of two resistance levels in one day on Friday, how long will it take to break out of the $2.75 resistance level? Most likely the next trading day on Monday.
- Technical Analysis tells you that when the stock spiked it only dipped to $2.15 area and could not dip lower. The next dip was in the $2.24 area and the next dip was the $2.41 area. So this stock made lower highs and all it needs is morning volatility given the face that this stock
- Competitors like MOBI which plays in the same arena has gone from the $3's to the $5's then in a couple of days went all the way to the $10's
- Timothy Sykes who is a profitable consistent Small Cap and Micro Cap Trader is also bullish. Timothy Sykes is the George Soros in the Small Cap and Micro Cap Space. This trader turns out to have a great skill in picking stocks that can gap up ever since he made his millions by buying gap up stocks and break out stocks. Recently, Tim Sykes talked about stocks like $YOD in the mid $2's to the $3 range before it gap up and spike all the way to mid $7's early February. Another stock was $EKSO where Tim Sykes nailed it in the $4's that gap up to the $6's which is over $1 gap up pre market! He has been trading for over a decade so picking stocks that has huge gap up potential is a skill that he has perfected. He recently talked about $SMSI in the $2's and the pattern is always the same when the stock is near resistance at $2.70's, that calls for a breakout.
- Mobile Messaging
- Premium Messaging App Play
- Social Media (Twitter)
- Beat Earnings Estimate (Earnings Winner)
- Partnership with Intel
- SMSI being undervalued at a $2
- New technology launch
- Success of competitors like MOBI ($3 to $10) & GOMO ($15 to $30) - Breakout Stock- Timothy Sykes Bullish (impeccable track record with $YOD and $EKSO gap up break outs)
= Very Bullish / Risk = $2.20 Reward = $3.00 - $4 ..Risking 20 cents to make $1 a share which is the case for a LONG
Disclosure: I am long SMSI.
Additional disclosure: 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.