Catching the Next Boom: On Track Innovations – Buy, Sell or Hold? Posted by Dave Goodboy on Jan 26, 2011
Every investor dreams of catching the next boom. Riding the wave of change in the high-tech field is how fortunes are made. Improvements and innovations in the way we do things are everywhere; it just takes an ear on the ground and a thoughtful eye to find them. One needs to look at the macro picture then drill down into individual companies that stand to profit from potential macro changes. Surprisingly, clues to the next big thing are often overlooked by even the most sophisticated investors. Following initial changes in the way major innovative companies do business is one way to locate the next booming technology.
With this in mind, coffee shop king Starbucks (Nasdaq: SBUX) has just rolled out mobile, wireless payment options for its millions of daily customers. No longer do these coffee addicts need to fumble for credit cards or cash to pay for their expensive drinks; all it takes is a wave of their smart phone to make a purchase.
I believe this is signaling a major change in the way all retailers do business. Once the public gets use to paying this way, they will not only expect other merchants to accept this payment method, they will demand it. Numerous new companies will stand to make great profits from this fundamental change in the way retail transactions are done.
One small-cap company already in this space is Israel based-On Track Innovations Ltd (Nasdaq: OTIV). The company designs, develops and markets contactless microprocessor-based smart card technology products in the Americas, Israel, Europe, Africa and the Far-East.
Its products include payments solutions, petroleum systems and smart ID solutions that comprise PayPass, a contactless payment program for financial institutions; E-purse, a product that enables a person to load pre-paid value on a card; EasyPark, an electronic parking payment system; and mass transit payment system for fare collection from passengers in various types of mass transportation systems.
Most excitingly, the company recently released a product called COPNI (Contactless Payment and NFC Insert). This device connects to SIM cards in mobile phones creating mobile wallet solutions and the ability for secure transactions.
On Track Innovations is rapidly expanding, with nine month 93% revenue growth to $43.6 million. The company projects $60 million in revenues this year. Technically, the stock has been uptrending for the last several months. Price is above the 20-day simple moving average that is acting as support and resistance appears around $4.20 per share.
Tagged as: new technology stocks, OTIV, SBUX, starbucks stock, tech stocks
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