April 25, 2006
SpeculatingStocks.com Stock Pick: Infosonics Corporation (IFO)
Stock Price: $5.40 (short-term strong buy)
We first released IFO as a stock pick on December 30th of last year as a long-term strong buy at $16.24. IFO moved as high as $23.93 on January 13th of this year before dropping to its current level. IFO came within seven cents of reaching our target price.
InfoSonics Corporation is a distributor of wireless handsets and accessories in the United States and Latin America. The company sells wireless telecommunication products and accessories to dealer agents and network operators.
IFO is focused on the rapidly growing Latin American market. Cell phone companies need distributors such as InfoSonics to deliver their hardware to countries such as Mexico, Venezuela and Brazil. InfoSonics just opened a new sales and operations facility in Mexico.
IFO reported revenue of $145.79 million for 2005 with net income of $2.7 million. IFO is trading at 0.50 times sales and trading at a market cap of only $73.25 million. Earnings will be released on Monday, May 8th.
We expect IFO to become one of the next TZOO-type movers in the market. TZOO has risen 166% in the last seven days. TZOO reported revenue of $16.9 million and net income of $4.1 million for the latest quarter. TZOO has 16.1 million shares outstanding and 3.5 million in the float. IFO has only 6.7 million shares outstanding and 2.57 million in the float. If IFO receives the right market recognition, it could move up more than TZOO's 166%.
Look for IFO to break through its 50 day moving average now at $11.10 and break out much higher from there. IFO has little downside from here with its two months of consolidation at $10.00.
SpeculatingStocks.com Target Price: We expect IFO to reach $12.00 within the next 1 - 3 months.