Wednesday, 29 February 2012

The Future is Mobile Payment

Google, Mastercard, Barclaycard, Ebay, Visa, Amazon, to name a few, what do all these companies have in common? The answer, mobile payments!

They all see mobile payments as the future and are gearing up their efforts to make this a reality sooner than we all might think.

Mobile payment is an alternative payment method. Instead of paying with cash, cheque or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods such as:

  • Music, videos, ringtones, online game subscription or items, wallpapers and other digital goods.

  • Transportation fare (bus, subway or train), parking meters and other services

  • Books, magazines, tickets and other hard goods.

And why is this important ?

Firstly the technology, NFC (Near Field Communication), that allows mobile payment and other remote transactions via smartphone has been around for awhile but has been gaining traction recently, analyst predict a 1.5b growth in the number of handsets with NFC capability over the next 3 years.

More recently Visa the world’s largest payment processor announced a major partnership deal with Vodafone that will allow mobile phone customers to pay for goods and services using their handset, read full article on Visa

Google, Barclaycard, Paypal are all ramping up activity in this new and competitive market.

All this bodes well for an investor looking for an early opportunity to invest in an emerging market with good growth potential, a few stocks on my radar that could do well when mobile payments finally take off and have an integral part to play in this new and exciting market are Verifone (PAY), NCR Corp (NCR), Global Payments (GPN), NXP Semiconductors (NXPI), Broadcom (BRCM), let us take a closer look at them below.

Verifone (PAY)

Verifone Systems, Inc. designs, markets, and services electronic payment solutions in North America and internationally. It provides system solutions, including countertop electronic payment systems that accepts magnetic, smart card, contactless/ radio frequency identification(RFID) cards, and near field communication(NFC) enabled mobile phones; secure PIN pads that support credit and debit transactions; and wireless system solutions that support Internet protocol-based code division multiple access, general packet radio service, bluetooth, and wireless fidelity technologies. The company also offers products for consumer-activated functionality at the point of sale; contactless/NFC payment solutions consisting of contactless readers primarily for consumer-activated transactions with contactless cards, tokens, and NFC-enabled mobile phones; and Gemstone family of products comprising integrated electronic payment systems for petroleum companies. In addition, it provides server-based payment processing software and middleware; unattended and self-service payments hardware and software integration modules, such as vending machines, ATMs, ticketing kiosks, petroleum dispensers, public transportation turnstiles and buses, self-checkout, bill payment, and photo finishing kiosks; retail bank branch solutions; mass transportation solutions; and network access solutions. Further, the company offers client services, customized application development, advertising publishing, taxi payments and advertising, cardholder data security, annual software maintenance program, and repair services. It serves financial institutions, payment processors, petroleum companies, large retailers, taxi fleets, government organizations, healthcare companies, independent sales organizations, and advertisers.

NCR Corp (NCR)

NCR Corporation provides technologies and services that enable businesses to connect, interact, and transact with their customers in the financial industry worldwide. It offers financial-oriented self service technologies, such as ATMs; cash dispensers; software solutions, including the APTRA application suite; and consulting services related to ATM security, software, and bank branch optimization for financial institutions, retailers, and independent deployers. The company provides self-service kiosks to the retail and hospitality, travel and gaming, healthcare, and entertainment industries; retail-oriented technologies, such as point of sale terminals, bar code scanners, software and services; wireless self-check-in/out for patients with information systems and physician practice for management systems; check and document imaging solutions consisting of hardware, software, and consulting, and support services that enable capture, processing, and retaining of check and item-based transactions.

Global Payment (GPN)

Global Payments Inc. provides electronic transaction processing services for merchants, independent sales organizations (ISO), financial institutions, government agencies, and multi-national corporations located in the United States, Canada, Europe, and the Asia-Pacific region. It offers a comprehensive line of processing solutions for credit and debit cards; business-to-business purchasing cards; gift cards; and electronic check conversion and check guarantee, verification, and recovery, including electronic check services, as well as terminal management. The company also offers proprietary software products to establish revolving check cashing limits for the casinos' customers in the gaming industry. In addition, it sells, installs, and services automated teller machine and point of sale terminals; and provides card issuing services, including card management and card personalization. The company markets its products directly, as well as through ISOs, retail outlets, trade associations, alliance bank relationships, and financial institutions.

NXP Semiconductors NV (NXPI)

NXP Semiconductors NV, through its subsidiary NXP B.V., provides mixed signal solutions and semiconductor components primarily in Japan, Europe, South Korea, Rest of Asia Pacific, and the Americas. It offers small signal, power, and integrated discretes; and amplifiers, bipolar transistors, data converters, diodes, rectifiers, microcontrollers, sensors, and thyristors. The company's products are used principally in automotive, identification, mobile, consumer, computing, wireless infrastructure, lighting, and industrial applications. It also develops audio and video multimedia software solutions for mobile phones.

Broadcom Corp (BRCM)

Broadcom Corporation designs and develops semiconductors for wired and wireless communications. It provides a portfolio of system-on-a-chip (SoC) and software solutions for the manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices, which enable the delivery of voice, video, data, and multimedia content to the home, office, and mobile environment. Its broadband communications products include cable modem SoCs; femtocell SoCs; MPEG/AVC/VC-1 encoders and transcoders; xDSL, passive optical network, and cable modem customer premises equipment and central office solutions; powerline networking SoCs; and digital cable, direct broadcast satellite, terrestrial, and Internet protocol (IP) set-top box integrated receiver demodulators. The company's mobile and wireless products comprise Wi-Fi and Bluetooth SoCs, wireless connectivity combo chips, global positioning system SoCs, multimedia processors, applications processors, power management units, VoIP SoCs, mobile TV SoCs, and near field communications tags. Its infrastructure and networking products include Ethernet copper transceivers, Ethernet controllers and switches, backplane and optical front-end physical layer devices, security processors and adapters, and broadband processors. The company markets and sells its products through direct sales force, distributors, and manufacturers' representatives in the United States, as well as through regional offices, and a network of independent distributors and representatives in Asia, Australia, Europe, and North America.

Charts and Company Info courtesy of

Mobile payment it seems is here to stay but much depends on integration by the retailers and public acceptance of this new way of payment, from the charts above we see that these companies have come a long way of their lows in 2011 and are at potential buy areas,some like PAY have broken out,in my next blog we will look at ways to trade this and what investment vehicle will work best such as OPTIONS more specifically using LEAPS ( LONG TERM ANTICIPATION SECURITIES).

Be Safe and Serene.

John O

Tuesday, 14 February 2012

Spirit Airlines (SAVE) Bull Flag Breakout

As a trader, one of the key rules in finding great stocks with good upside potential is to look for what companys the big institutional investors are quietly buying but are still under the radar to most investors.

How do you find these stocks ?

The key is to watch the volume and price action of a stock with good fundamentals,especially when the stock has been thinly traded in the past.

One such stock that has come on my radar and is one to watch is Spirit Airlines, Inc,(SAVE).

Spirit Airlines empowers customers to save money on air travel by offering ultra low base fares with a range of optional services for a fee, allowing customers the freedom to choose only the extras they value. This innovative approach grows the traveling market and stimulates new economic activity while creating new jobs. Spirit's modern fleet, configuration and other innovations enable Spirit to burn less fuel per seat than competitors, making Spirit one of the most environmentally-friendly U.S. carriers. Spirit's all-Airbus fleet currently operates more than 175 daily flights to over 45 destinations throughout the U.S., Latin America and Caribbean.

With such a sound business model and in the current economic climate where everyone is looking to save money it is no surprise ,why institutional investors like this stock.

The airline went public in may last year at $12 and has been thinly traded since then until recently,but interestingly last 3 quarters average EPS growth is 329%!, EPS change last quarter 117%,sales last quarter 42%. Spirit Airlines announce earnings on Feb16,if it beats earnings then this one to watch for the right buying opportunity.

Technically the chart shows a bull flag breakout pattern, the stock has a had a good run up since mid January and a four day correction which was very constructive on low volume which is what you want to see with a bull flag pattern, a potential entry point will be around the $20.05 price level .

View chart below.