Sometimes, the greatest opportunities are hiding in plain sight. Yet, they’re often ignored.
Iridium Communications (NASDAQ:IRDM) is the perfect example.
IRDM is the only mobile voice and data satellite communications network that spans the entire globe. That network enables connections between people, organizations and assets to and from anywhere, in real time. Together with its ecosystem of partner companies, Iridium delivers an innovative and rich portfolio of reliable solutions for markets that require truly global communications. The Company has a major development program underway for its next-generation network – Iridium NEXT.
Even better, in recent months, the company announced that Space X successfully launched the fourth set of 10 Iridium NEXT satellites into orbit.
That’s all part of the reason the stock recently hit a new high of $13.25.
But at one time, the stock was left for dead, ignored after emerging from bankruptcy in 2001. When we spotted the stock near its low, we saw signs of growth. Not only was it being awarded multi-million-dollar contracts with the U.S. Department of Defense, its billable subscriber rate was increasing.
In fact, at the end of the third quarter, the company had 655,000 total billable subscribers as compared to 595,000 a year earlier. Coupled with DoD contracts, we were intrigued by what we saw.
So, The Cheap Investor issued a recommendation to buy the stock at $5.87 in December 2013.
As others woke up to the opportunity, the stock raced to $10.94.
By October 2015, after the stock pulled back from $10.94 to $6.12 (thanks to a 1,000-point sell off on the Dow Jones Industrial Average), we recommended buying shares of IRDM again at $6.40.
Fundamental growth was now stronger than ever. In fact, at the time, net income was $29.5 million, or $0.24 per diluted share, for the third quarter of 2015, as compared to $20.4 million, or $0.17 per diluted share, for the third quarter of 2014. Operational EBITDA for the third quarter was $63.8 million, as compared to $58.4 million for the prior-year period, representing a year-over-year increase of 9% and an OEBITDA margin of 60%.
We had no question the stock was showing rapid progress.
Simply by paying close attention to fundamental growth and stock price, when others ignored the stock, we watched IRDM explode to a recent high of $13.25, handing our subscribers potential wins of 126% and 107% respectively.
We’ll have even more opportunities just like IRDM in the April 2018 issue of The Cheap Investor, which will be out shortly.