This teaser was first Gumshoe’d on December 10. The stock has bounced around a bit and has spent some time over $6 since then, but now that the shares are dipping under $6 again the pitch from Roadrunner Stocks has been updated slightly to call this “The Best Tech Stock Under $8.”
The company teased here by Jim Fink issued some cautious guidance on part of their business in mid-December and the shares dipped a bit, then there was chatter about them putting themselves up for sale last week and the shares spiked briefly… other than that, no substantive news since the teaser campaign started — earnings are likely to be reported in about two weeks. What follows is unchanged since it was published on December 10:
There are a lot lot lot of advisers throwing out “buy this one-time opportunity” in oil and energy stocks these days, since we all love to be contrarian and buy cheap, but after such a dramatic price drop in oil I’m taking a break from that topic for the day… I just don’t have a clue whether the next big move is up or down, and the stocks are all overreacting every which way.
And we’ve also been inundated with biotech ideas, including yesterday’s pitch from the new Stansberry Venture, so I was looking through the pile for teases that didn’t have anything to do with either energy or medicine… and a pitch that came in yesterday for Jim Fink’s Roadrunner Stocks stood out. That letter’s been around for a couple years now, with one big winner (Gentex) and a few losers (Carbo Ceramics) last year… his teased picks that we’ve covered this year haven’t been dramatically good or bad so far.
And now he’s telling us he’s got a “picks and shovels” play on the next great wireless standard, a company that will win regardless of which new standard for in-home wireless gets adopted, and he calls it the “Best Stock Under $6.”
So… wanna know what it is? Me, too… let’s check out the clues.
Fink starts us out by laying the groundwork for the showdown — and, to be fair, this is a long time coming, WiGig and WirelessHD have both been promoted by their respective developers and consortiums for several years already. This is the “story” part…
“There’s a battle raging in the fast-moving world of Silicon Valley. Like VHS tapes snuffed out Betamax… and CDs killed cassettes… the winner of a new ‘gold standard’ for data is about to be crowned.
“I’ve discovered a tiny company that figured out a way to make money from this new $10 billion market—no matter who comes out the winner….
“The tiny company I’m about to show you has the potential to turn every $10,000 invested into a life-changing $214,290….”
And the “battle” is being waged largely because of the “Internet of Things” — the always connected world of all kinds of stuff, from refrigerators to thermostats to watches to door locks. That will put much more pressure on networks in general, as many more devices have to connect to the internet… but when you’re talking about the “smart home” part of it the pressure will largely be on WiFi networks.
Here’s some more from Fink:
“… the Internet of Things is an immense market.
“That’s no secret.
“But what most investors overlook are the pockets of profits hidden inside markets like these….
“The technology driving this growth makes it possible to transfer data 18 times faster than Wi-Fi….
“It operates on a totally different frequency (60 GHz) than Wi-Fi, and it’s impressive.
“We don’t need to bother with the technical details here. But suffice it to say, its goal isn’t to replace Wi-Fi but rather to supercharge it.
“And it does a tremendous job.
“So much so that 1.5 billion more devices will use this technology by 2018….
“First, though, a major problem needs to be solved.Are you getting our free Daily Update
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“There’s no ‘gold standard’ for this frequency.
“And that’s set up a battle between two powerful groups. Each is vying to be the winner in this $10 billion market.
“This showdown has created a massive opportunity for one small company….”
That’s what it always comes down to, doesn’t it? We start off with a huge industry-wide trend that sounds familiar enough to everyone (Internet of Things, WiFi needs upgrading), and then we skip right on down to the “one small company” who will have a huge opportunity because of it. It’s a time-tested approach for advertising copywriters, and it sure works — when you throw around $10 billion as a “market” and then hint at a much smaller company who can grow dramatically to serve that market, your brain almost automatically connects the dots in a straight line and you start to imagine the armored car dumping a load of Krugerrands on your front lawn.
So who is this “one small company?” Let’s see what hints we get from Fink:
“Just as VHS tapes snuffed out Betamax… and CDs killed cassettes… there’s a new turf war taking place for high-speed data supremacy.
“On one side is the WiGig Alliance.
“Members of this group include industry giants like Qualcomm and Microsoft.
“Qualcomm believes so much in WiGig’s future that it paid 30 times sales to buy a company leading the charge in its development.
“On the other side of the battle is the WirelessHD Consortium. It boasts members like Panasonic, Samsung, Sony and Toshiba….
“That’s why I’m so enthusiastic about the company I’ve found.
“It’s set to profit no matter which side wins the battle.
“How can it do that?
“Simple: It’s a modern-day ‘pick and shovel’ company.”
And then he gets a bit more specific, so we do get a few juicy tidbits that we can throw into the Mighty, Mighty Thinkolator…
“It’s a tiny company that leads the market in high-speed data connectivity—with over 500 patents in three major product areas.
“I’m 100% sure that if you’re reading this on a laptop or desktop computer, you have a piece of this company’s technology.
“And you’re using one of its products every time you fire up your flat-screen TV, too.
“What’s more, nearly a billion mid-range smart