Hot Penny Stocks – Openwave Systems (OPWV)

News just came out about a new bet made by one of the most prolific investors of our time. Warren Buffet has apparently had his eye on tech. He just bought approximately 5.5% of IBM, or 64 million shares, for about $10.7 billion.

IBM obviously doesn’t fit the criteria of a small cap value stock. But if you’re looking for a tech for your radar with a more buyer friendly price tag check out this week’s pick.

 

QUICK FACTS
Ticker                                OPWV
Industry                             Application Software
Recent Price                    $1.61
Market Cap                       $137.6 m
Shares Outstanding         85.5 m
Average Volume               619,943
Dividend Yield                   N/A
Website                            http://www.openwave.com

 

COMPANY DESCRIPTION

Openwave Systems (OPWV) is synonymous with mobile internet usage. The company has approximately 200 patents related to smart devices, cloud technology and unified messaging.

The company has helped its operating customers accomplish a number of industry firsts including mobile browsing, photo-messaging, and the first Wireless Access Protocol (WAP) deployment.

Mobile data and bandwidth are in high demand. Openwave is developing ways for operators to get more out of their data capabilities and limited bandwidth. These operators, or communication service providers, include internet service providers (ISPs), wireless and wired carriers, and broadband providers.

 

FINANCIALS

Openwave’s third quarter numbers were just released a week and a half ago.

The company reported revenue of $52.4 million in the third quarter, up year-over-year from $41.5 million. This is a year-over-year increase of 22.3%. OPWV also reported a net income of $2.6 million… a sharp increase from last year’s Q3 profits of $71,000.

As of September 30, 2011, the company reported $23.9 million in cash and no long term debt.

 

KEY METRICS ANALYSIS

Trailing P/E                              N/A
Price / Sales                            0.8 x
Return on Assets                   -4.5%
Insider ownership                    10.5%
Short Ratio                               6.6 x
Current Ratio                           1.7 x
Total Debt To Equity                 N/A

 

RECENT EVENTS

On August 31 2011 Openwave filed a complaint against Apple Inc. (AAPL) and Research In Motion (RIM) with the International Trade Commission.

In Openwave’s complaint they accused both companies of profiting off of Openwave’s inventions. The company argued that some of the breakthroughs it developed became foundational to mobile internet technology. Openwave claims it has not seen any royalties from these companies they say utilized those advancements.

Openwave has compiled a pretty comprehensive list of offending Apple and Blackberry products. Including iPhones 3G, 3GS, 4, the iPod Touch, iPads, and Blackberry’s Curve 9330 and Playbook.

 

MANAGEMENT TEAM

Mike Mulica – CEO
Anne Brennan – CFO
John Giere – Senior VP, Products and Marketing
Sean MacNeill – Senior VP, Engineering and Global Services

 

STOCK ANALYSIS

 

 

 

 

 

 

Chart courtesy of stockcharts.com

OPWV’s 52-week low was $1.17 and the 52-week high was $2.67. Right now the stock is trading at $1.61. The 50-day moving average is near $1.58 a share and the 200-day moving average is at $1.91. The company has a market cap of $137.7 million and 85.5 million shares outstanding.

 

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