Opening Disclosure — Long-time readers should note some significant changes in how I communicate in the public domain. The primary purpose of this forum is now to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.
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.
SMSI SPECIAL REPORT: Safe & Found Reads Into Sprint’s Retail Channel
PART I – Intro & Top Level Data
FYI, I’LL BE HOSTING MY NEXT STOCK RESEARCH & INVESTING LIVE Q&A ON WEDNESDAY AT 1PM ET. DON’T MISS IT!
First, I want to thank everyone who participated in this boots-on-the-ground research effort. The response was fantastic. The 50 or so investors who contributed to it have been rewarded by receiving this entire report last week.
Everyone else will benefit from their efforts, but will receive it in parts over the coming days. In the future, if you’d like to be among those who get it early, please consider contributing to our next collaborative effort!
FYI, we gathered data on nearly 200 stores (nearly 5% of all Sprint stores in America!). That effort has provided us with valuable insight into the Safe & Found rollout at Sprint (and therefore, how well SMSI’s SafePath product is likely to perform in the months and quarters ahead).
Of equal importance, I have presented the findings to key people involved with the Safe & Found initiative. Based on the feedback, I believe that our efforts will contribute to its success (and therefore the success of our investment).
Speaking of which, please visit my Twitter page and Retweet as many of my Safe & Found Tweets as possible.
Spreading the word will help to raise awareness, adding value to our investment!
Before we get rolling, here’s a statement regarding this study’s statistical significance. I want to note that it was contributed by the StoryTrading Research Group. They’re doing great work to advance the virtues of boots-on-the-ground fundamental research (which is dear to my heart), along with profitable trading strategies.
Jumping right in, while our data has provided extraordinarily valuable insight, it should be noted that the z-statistic (required to calculate C.I.) cannot be calculated on a non-normal distribution as seen below.
Therefore, here is the descriptive statistic on the number of sign-ups per week and its implications
|Number of Sign Ups|
This means that on average, based on our sample size, each store is signing up an average of 3.55 subs per week. The mode here is 0 which is almost assuredly attributed to a timing issue where Sprint hasn’t fully rolled out the Safe & Found Initiative.
In fact, our hit-rate for in-store posters was roughly 25% just a few weeks ago… but is now over 60%. Once this gets close to 100%, I expect that things will really start rolling nicely.
For data process-ability, the StoryTrading group was kind enough to provide an analysis showing what happens if we eliminate the stores with 0 signups:
|Number of Sign Ups (w/o “0” Stores)|
As expected, the mean gets a nice bump with the most frequently appearing number (mode) being 1. What this means is that, if a store does indeed roll out this initiative, on a national level, each store will see about 4.7 signups per week but don’t be surprised to see a store that is signing up at 1 per week.
The high standard deviation (5.24) is indicative of the fact that we are in the early stages with some highly successful signups to some just getting started.
OK, with that said, let’s do some more diving into the numbers.
FYI, this analysis focuses on the original 151 store checks that were sent to me before the survey deadline. The subsequent data looked similar, so I’m not going to spend extra time to redo the entire analysis for the late-comers.
First of all, anecdotal feedback makes it clear that families are signing up at an extremely high rate. The average attach-rate in our survey was a whopping 69%. I should however caution that the sample size was very small. Among stores reporting an overall attach rate, the sample size was also small but came in at an extremely-strong 30%. Anecdotally, non-families have been finding novel ways to use Safe & Found (i.e. bosses in charge of small groups of workers). This has extended Safe & Found’s appeal beyond families, something we can expect to continue as its functionality expands (especially when its IoT capabilities are rolled out).
Of course, the key stat is that the average Sprint Store in our survey is doing 3.56 subscription sign-ups per week.
That implies an overall attach rate of 15% (suggesting that our aforementioned 30% data is indeed affluent-area skewed). But that’s still enough to add over 750,000 subscribers per year (Sprint added 1.275M new customers in Q1, which is 5.1M annualized).
Now, obviously we shouldn’t count on that. Indeed, there are mitigating factors that likely impacted our data set. However, what’s great about the number above is that they leaves more than enough room to overcome our affluent-area skew (something likely caused by the fact that we are all stock investors who likely called stores in nice areas, near where we live).
What does this all mean for SMSI and its future EPS?
Well, if you do the math, you can figure it out. If you want me to do it for you, I’ll tell that it leaves me bullish relative to my past research on SMSI. So, you can check out what I’ve written or…
Stay tuned for Part II, coming tomorrow!
ALSO, I’LL BE DISCUSSING MORE FINDING DURING MY NEXT STOCK RESEARCH & INVESTING LIVE Q&A
WEDNESDAY AT 1PM ET. DON’T MISS IT !
- 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 SMSI. 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.