Back in mid-January when I first suggested Novatel Wireless Inc. (NASDAQ:NVTL) was a compelling buy, I knew the company - and the stock - had a lot of upside. Frankly though, I didn't think too many investors cared much one way or another about NVTL. Now that it's run up from $1.46 then to the current price of $2.21 (a 51% romp), however, it seems to be turning some more heads.
Probably about 8 times out of 10, this is when I'd take a contrarian stance and suggest taking profits - the hype is maxed out, and the rally's getting tired. Novatel is one of those 2 out of 10 times, though, where there's actually more upside in store despite the fact that the secret's out and the gains have already been big.
The nearby chart explains part of that point of view. After breaking above a long-term falling resistance line (red) NVTL worked its way past that 100-day moving average line (gray) once and for all later in January, and continued on above the 200-day moving average line (green). It wasn't a straight-line move though; Novatel Wireless shares ebbed and flowed the whole time. That's good, however, in that it means there's not any overbought pressure to contend with now... the kind that would normally beat a stock back pretty good.
Translation: I still see NVTL as a safe buy.
It's not just a chart-based argument though. There are a couple of new developments from the company that are supporting more of the same rally.
One of them is the recent unveiling of the machine-to-machine (M2M) N4A device manager; the technology allows users to better manage M2M assets. It remains one of the most obscure and overlooked areas of growth out there, but after generating about $38 billion in revenue last year, the machine-to-machine era will surely start catching some eyes, even as it continues to grow. Novatel now has that hat in the ring.
The other is the recent introduction of the 4G LTE Mobile Hotspot MiFi 2 technology (and related interface). In simplest terms, it creates a personal mobile hotspot that can serve several wireless devices. It's not a new kind of device, but Novatel Wireless' version is the current best of breed, if recent awards and accolades are any indication.
Bottom line? This remains one of my favorite "never heard of it/what do they do?" stories for 2013. The products are great, and they're starting to sell pretty well... one of the missing ingredients for NVTL for the bulk of 2012.
You know who else like Novatel? The SmallCap Network does. The site named it one of its featured stocks later on in November, which is sort of an accolade in itself - the SCN only focuses on a handful of what it thinks are solid trading ideas at a time, and NVTL was one of them. If you want to get the SmallCap Network's ongoing analysis of Novatel Wireless [or learn of they've changed their mind], the best thing to do is sign up for the free newsletter.
On top of that, NVTL is one of the current holdings in the SmallCap Network Elite Opportunity portfolio. This premium service only suggests the very best of the best names, and follows those picks through to the very end when it's time to give those picks the boot. If you like the SCN free newsletter, you'll love the SCN EO, because it gives you more picks, deeper analysis, and builds your bottom line better. Here's what it's all about.