Wednesday, March 29, 2017

Ever Hear of NQ Mobile?

NQ Mobile [NQ]  - all numbers and information about company come from

I'm sure you haven't. If you have, then you are better than me. NQ Mobile - used to be NetQin Mobile - is headquartered in Beijing making it a Chinese stock. The basis of their business is supplying mobile internet services to the people of China. They have products under their umbrella in the fields of mobile security, privacy, optimization, cloud stuff, and family protection. 

For a better picture on what types of things they actually offer: NQ Mobile security which protects users from mobile viruses and hackers. NQ Mobile Vault protects pictures and videos and text messages. NQ Family Guardian helps parents monitor their children's phone usage. The company also provides platforms for entertainment and apps that users can program themselves for full customization. 

The stock itself has been hovering between $3 and $5 dollars for the past two years. The sentiment I gather from other people following this stock is not great. Keep in mind that they are people, not institutions or firms analyzing the financials. It's a pretty small company relative to those in the S&P500 and not in the eye of most analysts. However, I'm sure most of these people are smarter than me, but we will see. 

NQ Mobile apparently is cooking up a deal to sell FL Mobile, Showself, and invest $100 million US dollars. Evidently similar news has been presented in the last two years and both times the non binding contract ended up falling through. Some say this won't be any different. That news became public January 23rd and popped the stock some 12.50%.

Since this is a smaller company ($361.61 million dollar market cap) and hardly followed by anyone, it has a greater potential to be priced incorrectly. The average volume here is 387 thousand shares traded every day which is high enough to keep the bid/ask spread a little closer, but not so much that arbitrage opportunities will be missed in a nanosecond. 

NQ's sales over the last 5 years has seen a 87.2% growth and the EPS is not far behind. The projected EPS growth over the next 5 years is 40%. If I had access to more information right now I could try and see if any of theses numbers were telling about their future more so than just saying it, but I do not. 

I found this particular stock because I was screening for any that had the 50 day moving average cross above the 200 day moving average. Obviously it doesn't work every time, but I have been noticing that it is a very telling sign. Much more than other technical indicators in the longer term. The golden cross just happened earlier this month and after some good news with the contract, I like the outlook of this stock for the year. 

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