Every single time the Apple iPhone is revised, refreshed or upgraded the wave of teasers comes crashing down upon us once more.
Not that we’re complaining, mind you — this is, after all, the path we’ve chosen: They tease, we de-tease … if they stop, we stop. And frankly, we don’t have anything better to do at the moment … so I hope they’ll keep it up. I expect we have little to fear on that front.
There are some reliable pitches that come around every few months when there’s big mobile news — the Motley Fool’s persistent teasing of American Tower as a play on growing mobile data demand has been nonstop (and a successful pick), and there have been a handful of folks who tease Corning (GLW) every few months as a play on the increasing volume of gorilla glass-featuring tablets and smart phones. I don’t write about those pitches every single time they’re rehashed — even your friendly neighborhood Gumshoe gets a bit bored with enough repetition — but this time around we’ve got a new stock being teased as an ancillary play that should see great stock performance (immediately, we infer) following the introduction of the iPhone 5.
Which, in case you didn’t notice, is happening tomorrow.
And they’re probably right … Apple tends to keep things very hush-hush, and there’s always a little surprise or “one more thing” lurking in there somewhere, but Apple has announced an event that has to do with the number five and that will happen tomorrow, so presumably the iPhone 5, with its larger screen and faster processor and LTE chip for faster data and whatever other tidbits they throw in, will be unveiled for the hungry masses and will be on sale within a matter of days or weeks after the announcement.
Ian Wyatt quotes analysts as projecting 80 million iPhone 5 sales being “in the bag,” which would certainly be good for both Apple and it’s suppliers … but he’s not actually touting a supplier this time around, he’s touting another service provider of some sort, and not a tower company, that helps to speed the massive flow of data to these iPhones.
Because that’s really been the story of the “smartphone revolution” — no one actually talks on their phone anymore, they text and use the web and use incredibly data-hungry web-enabled services like Apple’s voice-activated Siri assistant, which is why those early iPhones crashed the AT&T networks in NYC in past years and why networks are trying to gradually cut down on the “unlimited” data plans even as they continue to build out the next-generation “4G” LTE networks that provide a much faster data interchange and web browsing experience for mobile devices.
Here’s how Wyatt gets us excited in the ad, trying to get us to sign up for his Top Stock Insights newsletter:
“One Stock You Must Buy Before Apple’s HUGE Announcement Wednesday, September 12th
“Now is the perfect time to invest in this highly profitable company Fortune magazine calls a ‘supercharged performer’ and one of the fastest growing operations in the world –
“BEFORE the all-new iPhone 5 hits the shelves… and sends its shares even higher!”
And then he tells us that the iPhone releases specifically do bring better short-term stock performance for this secret stock:
“Outperforming Apple and CRUSHING The Market!
“Almost every year… like clockwork… this stock takes off when Apple-crazed consumers start buying up the latest version of the iPhone. Have a look:
- Up 79% in 9 months after the iPhone 3GS went on sale June 19, 2009.
- Up 95% in 5 months after the iPhone 4 launched June 24, 2010.
- Up 39% in 3 months after the iPhone 4S was released October 7, 2011.”
And he shows a chart of the big outperformance of this stock — since early 2008 the stock is up about 350%, while AAPL is up more like 250-300% over that time. I would only note that the chart move obscures the fact that for the last two years, AAPL has done far better than this secret stock — thanks largely to the fact that the unnamed stock has had huge spikes up and down and is currently down dramatically from recent highs.
And here’s his take on the big increase in data caused by iPhone usage:
“iPhones need fast, limitless access to data… available 24/7… and streamed from cell towers and buildings all over the world.
That may not sound like a big deal…
“But if you’ve ever received a shockingly large cell phone bill after watching streaming video or excessively browsing the web… you’ll know data doesn’t come cheap.
“It’s the most expensive part of your bill!
“And nobody knows that more than iPhone owners. Because they consume more data than anyone else.
“iPhone users are the world’s data hogsAre you getting our free Daily Update
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“They make up a whopping 80 percent of world’s heaviest data users, according to tech research firm Analysys Mason.
“In fact, last year alone… thanks in part to the release of Apple’s most data-hungry smartphone the iPhone 4S… worldwide mobile data usage DOUBLED!
“And what’s even more astounding is that the amount of mobile Internet traffic in 2011 was greater than all prior years combined!
“And this is just the beginning… According to future projections, mobile and iPhone data usage is set to nearly double EVERY YEAR for the next 3 years!”
And then we get into some specific clues about exactly which “secret” company Wyatt is pitching to benefit from tomorrow’s release:
“… all this skyrocketing data usage means windfall profits for this one company…
“You see, it’s this company that provides all the data iPhone owners need. It owns “virtual pipelines” of data that run to iPhones and allow them to use apps and access the Internet at lightning fast speeds from anywhere, anytime.
“If that sounds complicated… it is. No ordinary company could be tasked with such a vital role.
“In fact, this company’s technology is so important… it’s worked hand-in-hand with Apple for years to develop essential software for the iPhone, iPad, and iPod Touch — ensuring they have the fastest and most reliable mobile Internet access….
“… it doesn’t own a single cell tower…
“Its technology is pure code… Much like how Google’s huge competitive advantage is hidden deep with in its search algorithms… same goes for this company.
“It can expand networks and increase mobile Internet speeds, instantly, without erecting a single cell tower.
“In fact, this high-tech firm is so ahead of the curve… it just beat out Cisco — the $200 billion networking pioneer — to secure lucrative contracts… practically guaranteeing it years and years of business!”
OK, so it sounds like this is one of the “internet speeder upper” stocks — some sort of network technology or data compression technology to make stuff move faster. Which one, specifically?
Well, to answer that one we need a few more clues:
- “Analysts expect annual revenues to jump 20% to $1.39 billion in 2012 and to $1.6 billion in 2013.
- Earnings per share (EPS) is expected to rise from $3.44 to $4.44 for 2012 and $5.19 in 2013.
- And, in addition to Apple, it has thousands of customers including tech heavyweights — IBM, Dell, Microsoft, and Oracle – all paying millions for its essential technology.
“Plus right now it’s trading at just 22.5 times current year earnings… and only 19 times forward year earnings — nearly the lowest multiple in a year!”
So which stock is Wyatt pitching? Thinkolator sez this is: F5 Networks (FFIV)
F5 is indeed, at least in part, a “speeder upper” networking company — not unlike Limelight Networks (LLNW) or Akamai (AKAM) or Acme Packet (APKT) or any of a host of others, their primary mission is to move data more quickly from point A to point B. They all use different ways of doing so, whether it’s actually faster pipes or more distributed data or better data compression to make each file smaller, there are lots of ways that folks try to speed things up — but it’s all about speed and secure transmission. As you can probably imagine if you ever abandoned your virtual shopping cart because the site was moving to slow, or gave up on a link after it failed to load for you within three seconds, we all want faster, faster, faster everything, all the time, and there’s a huge amount of money at stake in fostering faster transactions or faster downloads or faster viewing of impossibly cute cat videos.
So … why is F5 our match? Well, they are indeed expected to post $1.6 billion in 2013 and $1.39 billion this year for their top line number — though it’s actually now $1.38 billion (one analyst cut forecasts over the last month), and their 2012 fiscal year ends in about three weeks so most of that $1.38 billion has already been made.