ZAGG Soars on Robust Results and Bullish Outlook
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    ZAGG keeps going – spurred by Patent Award and Investor Sentiment

    ZAGG keeps going – spurred by Patent Award and Investor Sentiment

    ZAGG Inc. (NASDAQ: ZAGG) had two extremely strong days to wrap up last week’s trading after the company that it was granted a new patent directed to protective covers for electronic devices such as full body invisibleSHIELD products.  The stock soared 13% over the period, setting a new all time record of $11.98 during the intraday trading on June 10, before closing the session at $11.63. Shares continued to climb this morning, surging more than 6% at market open.

    The recent patent award allows ZAGG to better defend its approach to protect electronic devices and could be a useful tool in competing against the developments of other payers. Going forward, the patent protection could facilitate the establishment of long term partnerships between ZAGG and manufacturers of smartphones, computer tablets or other electronic devices to tie the sale of invisibleSHIELD products with the sale of these gadgets. If the company succeeds to partner with a major player like Apple (NASDAQ: AAPL), Samsung or Research in Motion (Nadaq: RIMM), its stock price could skyrocket.

    The company’s shares gained more than 50% since the beginning of 2011 on solid results for 2010 and Q1 2011 that smashed analyst estimates. Besides, the introduction of a new line of ZAGGskins protective accessories designed to match Apple’s new iPad 2 device as well as the master license and distribution agreement with Logitech (NASDAQ: LOGI)  for its tablet accessory, the ZAGGmate case with keyboard, have also contributed to recent appreciation.

    ZAGG is a leader in providing clear and scratch-proof covers for smartphones, computer tablets, and iPod touch media players. The company’s products are distributed worldwide with popular brands like the invisibleSHIELD, ZAGGskins, ZAGG LEATHERskins, etc. As the demand for smartphones and tablets has grown, ZAGG has benefited from increasing need for its products, especially the shields it makes to protect devices from scratches.

    Revenue for the first quarter increased 207% to $27.0 million, from $8.8 million in the first quarter of 2010. Net income reached $3.3 million, or $0.13 per share, as compared to net income of $0.8 million, or $0.03 per share, in the first quarter of 2010. ZAGG benefited from new product launches, the introduction of popular new devices such as the iPad 2 from Apple (NASDAQ: AAPL) and other new mobile device introductions as well as continued strength in internet channels.

    Going forward, ZAGG revisited upward the outlook for 2011 due to better sales of its products on expanding product distribution and reach. The company now expects revenue for 2011 to range between $100 million to $105 million from a previous estimate of $95 million to $100 million. In addition, ZAGG expects gross margin for this year to be in the mid-to-upper 40s, and raises the range for operating margins to 21%-23%, from the previously given range of 19%-22%.

    The market trends are also favorable to ZAGG. Consulting firm Deloitte predicted that sales of computer tablets and smartphones could outnumber traditional plug in PCs already in 2011. It reported worldwide sales of smartphones and tablet computers would come to 425 million, well above sales of 390 million PCs. Research firm Gartner has further claimed that the global tablet market could almost quadruple in 2011 to 70 million units from 15 million in 2010, and expand to nearly 300 million by 2015.

    Despite the favorable trends, ZAGG continues to be heavily shorted. Moreover, the short interest reached a record of 8.8 million shares as of end of May, representing 50% of the float. The eventual short-buying back rally caused by positive news about the company, could cause a short squeeze and send the company’s shares in the skies.

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    While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

     

    About Microstockprofit.com

    Microstockprofit.com is committed to producing the highest-quality insight and analysis of small cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market, or penny stock market, which has traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

    Microstockprofit.com Disclaimer

    This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Microstockprofit.com is a wholly owned subsidiary of BlueWave Advisors.

    While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

     

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