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Sellers Of Inseego Are Missing The Shift Towards Enterprise And SaaS

Mar. 03, 2021 12:46 PM ETInseego Corp. (INSG)31 Comments


  • The market fears that the pandemic related work from home growth spurt in the company's sales has come to an end.
  • While that might very well be true, we think there is plenty of growth in the company left; the 5G rollout has only just started.
  • And fundamentally, the company is riding three different waves, which seem to be only in the first innings.
  • These waves are the 5G rollout, the enterprise market, and the foothold the company is gaining in both with its SaaS solutions.
  • Then there are the company's IoT solutions, which are also well positioned for further growth.
  • This idea was discussed in more depth with members of my private investing community, SHU Growth Portfolio. Get started today »

The shares of Inseego (NASDAQ:INSG) are selling off as the pandemic play/work from home accelerated demand phase is tapering, producing a disappointing quarter. However, if your horizon is a little longer than just the next quarter, we see multiple favorable trends for the company.

We originally bought the shares at $1.52 in October 2017 for a public portfolio that isn't active anymore and added them to our marketplace portfolio at $8.81 last September and recently at $12.85.

Given the huge selloff (this was a $20 stock only a little over a month ago), it seems that the market is much more concerned with the quarterly figures than with the longer-term trends, and asset prices have a habit of overshooting as well as undershooting.

Source: FinViz

There are cases where focusing on the long-term trends provides benefits as you get into shares about to enter a secular rising trend. In the case of Inseego, it's now working against us with the timing as the shares had already risen and are now digesting the disappointing quarter.

Nevertheless, we think there are multiple secular trends in favor of the company:

  • 5G build-out
  • Enterprise market
  • SaaS
  • IoT

5G Carrier Market

The first trend the company is benefiting from is the carrier market which is using 5G as a way to take on cable companies with fixed wireless and mobile hotspot solutions.

The competitive landscape has greatly improved for the company with the problems the Chinese competition is confronting as their network products are deemed to have security problems in a number of Western countries.

So, this cycle will be a multiple of the previous (4G) cycle as whole new use cases will be opened up for mass adoption, from the 10-K:

The introduction of 5G technology is rapidly expanding new enterprise and consumer

                                   If you are interested in similar small, high-growth potential stocks you could join us at our marketplace service SHU Growth Portfolio, where we maintain a portfolio and a wachtlist of similar stocks. 

We add real-time buy and sell signals on these, as well as other trading opportunities which we provide in our active chat community. We look at companies with a defensible competitive advantage and the opportunity and/or business models which have the potential to generate considerable operational leverage.

This article was written by

Shareholders Unite profile picture
Finding the next Roku while navigating the high-risk, high reward landscape

I'm a retired academic with three decades of experience in the financial markets.

Providing a marketplace service Shareholdersunite Portfolio

Finding the next Roku while navigating the high-risk, high reward landscape.

Looking to find small companies with multi-bagger potential whilst mitigating the risks through a portfolio approach.

Analyst’s Disclosure: I am/we are long INSG. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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