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Accordingly, this document should not be construed as an endorsement or recommendation of the companies or securities discussed herein. I am not an investment advisor and this is not an investment thesis. It is merely one part of the story, which I present for debate in hopes of determining all risks and upside potential. The disclosure at the end of this piece is critical to understanding the content and context of this document. Further, I frequently trade my positions and may buy, sell, or short the securities mentioned herein at any time, regardless of the facts or perceived implications of this article.
You’ll get this in the AM, but right now it’s 10PM local time and I just got back from today’s activities (which began at 8AM). The night was capped off with a few drinks at the W Hotel, where I spotted (and individually spoke with) several members of Chardan and Smith Micro.
Nobody from either side will admit it, but it’s clear to me that Chardan is preparing to launch coverage on SMSI. Based on my research into Chardan’s Jim McIlree, I expect a Buy rating and a generous price target.
Of equal importance, you don’t need a report from me to know that SMSI is being well-received at the conference (and that I was a buyer once again).
Even through Friday’s S-3 scared some retail investors out of SMSI in the morning (despite my warnings to the contrary), the stock took off Monday. It rose 7.55% on nearly a million shares of volume, the 3rd highest in over a year. Only the March financing generated more volume.
Despite what some might think, I’m sure I had almost nothing to do with today’s breakout. I was meeting with so many companies that I barely had time to think, much less share what I learned about SMSI.
In fact, my full write-up will have to wait another day because 1) I gathered too much information for one post and 2) I’m exhausted.
But many investors will be hearing the story today and tomorrow, so I’ll give you a quick taste for what happened…
Personally, I thought it was awesome. They provided a new set of exciting data points and addressed every concern I could think of. Sharing everything will require several days / posts.
I polled several investors and they all liked what they heard. Of course, they would like to see Sprint continue to ramp and for SMSI to sign new customers, but most didn’t realize 1) how much profit they stand to make with Sprint not 2) how many customers they’ve already signed — six — in addition to their pipeline of potential deals.
The scary part is that not many investors even heard the story before the market closed! Bill Smith finished his public presentation right at the closing bell (1PM PT / 4PM ET), so nobody in the presentation room had time to react to what they heard (nor would they react so quickly — these are professionals).
In other words, the only likely buyers from here were the small handful of investors that met with them one-on-one in the morning (and I was one of them).
Many of you commented that CEO Bill Smith’s presentation sounded good online. Well, you should’ve SEEN how it looked.
Smith had the largest presentation room at the conference (which holds about 100 people) and it was packed — standing room only. I feel confident that many of them will react in the coming days. When Bill Smith walked through his margin guidance for Safe & Found (a question I purposefully asked), the room lit up with pens to paper.
So, after meeting with just a few investors DURING market hours, the stock was up 7.55%. AFTER the market closed, they spent the rest of the day meeting more prospective investors (institutional and retail)… and will spend the next day and a half meeting with even more.
But the conference won’t end for them on Wednesday, because there’s no way they can meet with all of the prospective investors that were in that presentation room.
In short, with the effective float dwindling, the S-3 behind them, Sprint ramping, Chardan coverage likely to launch in the coming days, and a bunch of prospective new investors coming in, things could get crazy fast (as if Monday’s action didn’t qualify).
I told you that this was setting up to be a fun month ;^)
Anyways, I’m completely exhausted now, but I’ll give you one seemingly minor data point before I hit the sack:
I learned about one of many Sprint stores that just started selling Safe & Found yesterday. From what I heard, they signed four families. Now, that may not sound like much, but I keep preaching that you have to analyze every data point. So….
To put this one into perspective, if each Sprint store (there are 4,000 of them) sells just four subscriptions per WEEK (not per day, like this one did), SMSI’s revenue will increase by $8 million per QUARTER over the next year (on TOP of the $3 million per quarter that should come from Sprint’s current base of Location Labs customers).
Based on Management’s margin guidance, that could/would take SMSI’s EPS well over $1 per share.
And that wasn’t even the most exciting thing I learned today.
More to come. Stay tuned…
- The Quick Investor’s Guide To SMSI
- Tracking Sprint’s Safe & Found Roll-Out On Twitter
- Videocast: AEHR 10-Q, MoviePass Update
- Does SMSI Stand For “Smart Money Speeding In”?
- MoviePass Projected To Burn $600M In 2018
- Sprint Finally Rolling Out SMSI’s Safe & Found Nationwide!
- AEHR Grows 175% — Beats On The Top & Bottom Line (Buying More)
- SMSI 10-Q Released — Strategies For Trading The Stock
- Lose 33% In 9 Months To Make 1,000% In 15?
- GAIA vs. MoviePass: CAC Shows Which One Is A True Mini-NFLX
- Buying SMSI — Today Is The Day I’ve Been Waiting For!
- SMSI: Riding A New Trend & Making Its Latest Comeback
- Mark Gomes Research
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Disclosures / Disclaimers: I am long XXXXXXXX. However, this is not a solicitation to buy, sell, or otherwise transact any stock or its derivatives. Nor should it be construed as an endorsement of any particular investment or opinion of the stock’s current or future price. To be clear, I do not encourage or recommend for anyone to follow my lead on this or any other stocks, since I may enter, exit, or reverse a position at any time without notice, regardless of the facts or perceived implications of this article.
I am not a financial advisor. Nor am I providing any recommendations, price targets, or opinions about valuation regarding the companies discussed herein. Any disclosures regarding my holdings are true as of the time this article is written, but subject change without notice. I frequently trade my positions, often on an intraday basis. Thus, it is possible that I might be buying and/or selling the securities mentioned herein and/or its derivative at any time, regardless of (and possibly contrary to) the content of this article.
I undertake no responsibility to update my disclosures and they may therefore be inaccurate thereafter. Likewise, any opinions are as of the date of publication, and are subject to change without notice and may not be updated. I believe that the sources of information I use are accurate but there can be no assurance that they are. All investments carry the risk of loss and the securities mentioned herein may entail a high level of risk. Investors considering an investment should perform their own research and consult with a qualified investment professional.
I wrote this article myself, and it expresses my own opinions. I am receiving no compensation for it, nor do I have a business relationship with any company whose stock is mentioned in this article. The information in this article is for informational purposes only and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
The primary purpose of this blog/forum is to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.