| |
How Technology
Can Make Your Small-Cap Portfolio “Click”
By: Glenn Wilkins - AllPennyStocks.com News Reporter
August 7, 2008 (AllPennyStocks.com Media, Inc.) – Technology,
while imperfect, continues to advance humankind, relieving our
concerns about health, comfort and safety more effectively.
Technology can help get us where we want to go, and let our
loved ones know we arrived safely. Investment in technology
propelled stock markets worldwide to dizzy new heights at the
end of the last century, and the decline in the fortunes of
some technology companies accordingly caused a dip in market
fortunes from which we’re only now seeing a recovery.
All the more reason investors, particularly those with a small
cap focus, to bring their investigating tools along before
purchasing any of the multitude of fledgling tech companies –
primarily their magnifying glasses, figuratively speaking.
One such firm is California-based Globalstar,
Inc.
(NASDAQ:GSAT), a provider of mobile voice and data
communications services via satellite. Using at any given time
up to 48 in-orbit satellites and 25 ground stations (or
gateways) Globalstar offers voice and data communications in
more than 120 countries.
Of these gateways, 16 are operated by unaffiliated companies –
or independent gateway operators, and which purchases
communications services from GSAT wholesale for resale to
their customers. One of its most recent acquisitions was of
Loral Space & Communications, which paved the way for the
purchase of independent operators in Brazil. That purchase
took place in March, and represented part of an aggressive
expansion program on GSAT’s part.
More recently, in June, Globalstar expanded its network of
Simplex satellite data coverage to include Alaska, the
Aleutian Islands and other far-flung posts in the north
Pacific and southern Arctic Oceans. This enabled customers as
far south as Peru and Argentina to enjoy seamless Simplex data
coverage with many of the bells and whistles (personal
tracking, messaging, tracing and data monitoring) for which
there is a growing market.
Globalstar boasts a wide range of hardware products, designed
to support almost any voice or data communications
application. The list includes portable handsets (which
“provide service in areas where many cellular and landlines
may never go,” according to company literature), fixed phones
for remotely-located offices, data kits that enable
subscribers to connect a PC or PDA to the Internet, encryption
devices, aviation and marine products.
GSAT, whose chairman and CEO bears the resonant name of James
Monroe III, reported only slightly lower revenues in the first
quarter of fiscal 2008 than the same quarter the year before,
despite its SPOT satellite messenger being cited among the top
20 products on display at the Consumer Electronics Show in Las
Vegas in January. Like other companies of the same age and
same stage of product development, Globalstar recorded a
first-quarter net loss of $6.6 million (all figures in U.S.
dollars unless specified otherwise), compared to a slight gain
in net income in the quarter that began fiscal 2007.
The silver lining behind the cloud consists of the $4.3
million the company spent on marketing and advertising itself,
as well as other costs related to the launch of the SPOT
Satellite Messenger system and higher depreciation costs
connected to the placement of recently launched satellites
into service. The number of subscribers inched up in the first
quarter from 8,800 in 2007 to 9,100.
GSAT stock bottomed out for the year at just above $2.00,
after achieving a summit around $11.35, which could provide
thrilling news for bargain-seeking small cap investors, who
would find the stock around a more reasonable $2.75 these
days. Volume for GSAT was seen in the first sessions in August
around the 110,000 mark, meaning that others are at least
trying this stock on for size.
More on the fun side, but across the border, sits Chartwell
Technology, Inc.
(TSX:CWH), a Calgary-based company engaged in
developing, marketing, licensing, implementing and supporting
gaming applications and entertainment content for the Internet
and remote platforms. Chartwell’s Java and Flash-based
software products and games are designed for deployment in
gaming, entertainment, advertising and promotional
applications.
While the company neither owns nor operates any of its
clients’ gaming sites, it was from the casino end of its
operations that 88 per cent of its revenue streamed in during
fiscal year 2007. The company boasts a team of professionals
determined to provide leading-edge software and top-notch
customer support.
Chartwell closed in early August around the $2.40 mark
Canadian. The stock has experienced 52-week highs of $2.85,
gullies of $1.25, and while it’s at the upper end of that
range, the issue still has traders looking closely at it.
One highlight of fiscal 2007 for Chartwell was acquiring the
Poker community management business from Elite Club
Management, enabling the company to gain a greater foothold
among the growing online Poker market. Chartwell’s Linked
Progressive Jackpot (LPJ) system allows multiple operators to
take part in a common group of jackpot games.
More recently, CWH announced in June that it had received both
its remote and non-remote operating licences from the U.K.
Gambling Commission. This agreement enables the company to
make, supply, install and adapt gambling software, while
Chartwell’s gaming system undergoes a thorough certification
process in Great Britain, among the toughest standards
anywhere in the world.
Chartwell CEO Darold Parken calls approval for the British
licences confirmation of “our dedication to achieving the
highest probity in the online gaming industry.”
Also in June, CWH joined with Parlay Entertainment Inc.
(TSX-VENTURE:PEI) to launch an online bingo network,
powered by Parlay’s front-end bingo product with Chartwell’s
back-end administration. Both companies will contribute a
variety of slots and other soft games to the platform.
CWH has shown it’s clearly “in the game”, with net and
operating income both in the black during the first quarter of
fiscal 2008. Net income topped the $1 million Canadian figure,
on total revenues nearing $7 million Canadian, 26 per cent
higher than the same period the year before. Positive cash
flow figures should spark further interest from small cap
investors.
Lastly, for our purposes, Toronto-based BSM Technologies, Inc.
(TSX-VENTURE:GPS) specializes in getting people where
they’re going, and getting them back. At a time when folks are
paying more to gas up their family sedan, taking the shortest,
most direct routes is suddenly paramount.
BSM makes and markets a comprehensive line of Automatic
Vehicle Safety and Tracking (AVSL) solutions for commercial
and government fleet management, including law enforcement,
through its subsidiary BSM Wireless.
The company boasts a means of incorporating advanced wireless
locating and mapping technology, and IP-based communications
protocols, which provide real-time monitoring and control of
commercial and personal vehicles to meet the demands of
today’s mobile environments.
There were an estimated 1.2 million motor vehicle thefts in
the United States for the calendar year of 2002, a
1.4-per-cent increase over the 2001 year rate. The estimated
value of these stolen vehicles was over $8 billion.
BSM is especially high on the “Stinger” representing the key
technology behind the “Bait and Covert” application used by
law enforcement to deter auto, trailer and heavy equipment
theft.
The Stinger hardware is pre-installed in "bait vehicles" which
are left unattended in high auto-theft areas. Any one of eight
possible triggered events - such as a door or trunk opening or
a vehicle leaving or entering a geo-fence zone - causes an
audible alarm to go off at the BSM Stinger monitoring
workstation as well as alerting up to three different pagers.
GPS’ gross profit was off during the first quarter of 2008
from the same period the year before, but a nonetheless
encouraging $813,144 Canadian, on revenues of $1.6 million
Canadian, again down from the first quarter of fiscal 2007,
due largely to a hardware order backlog. Net losses amounted
to $880,860 in this year’s first quarter.
Once it gets those backlog problems under control, BSM looks
for a brighter future, in which it guides investors safely
home as well as its customers. The stock’s 52-week high came
in at 21 cents Canadian last July, its low around five cents
in the cold of March. The sharp drop experienced by the TSX in
early August put GPS in the lower half of that range, at
perhaps just the right price for investors thinking of
bolstering the technology portion of their portfolio.
Copyright © 2008 AllPennyStocks.com. All
rights reserved. Republication or redistribution of AllPennyStocks.com's content is expressly prohibited without
the prior written consent of AllPennyStocks.com.
AllPennyStocks.com shall not be liable for any errors or
delays in the content, or for any actions taken in reliance
thereon.
|
|
