This information can be found on our website in the Investment Picks Area of Our Members Page.
TMP Investment Pick
07/13/2009
Company: Clear Wire
Symbol: CLWR
Price: $5.63 (as of close Friday, July 10, 2009)
Action: BUY
Term: LONG
Type: Speculation
Price Target: $30 in 12 months.
Websites: www.clear.com www.clearwire.com
ClearWire, now called Clear, is popping up in major markets around the country, and their idea is a rather revolutionary twist on an already tried and true concept. They are turning internet mobile by basically transforming the cell phone towers around town, into giant internet routers, so you can pick up the internet anywhere you go, mobile, or at home. They are selling packages that compete with the ATT Wireless Mobile Cards, The Sprint version, as well as Verizon Mobile. The systems work differently, since the big dogs work on a satellite-internet system, and can go all over the world, but the Clear version of City-wide (and within 18 months, nationwide) Wi-Fi (which they call “WiMax”) is exactly that, a maximum range Wi-Fi connection, just like what you would find in your local starbucks, except it’s everywhere. You get the equipment you need free with a 2 year contract, just like what all the other companies do, and you are set up to go anywhere in town, or in any major market that they are set up in, without wires. In fact, their uncoined phrase is “Cut The Cord”.
Their infrastructure is set to eventually replace the internet services of your local “corded” or hard-wired companies, like COX, Comcast, Sprint, DSL, etc. etc. And their infrastructure system is built to sustain speeds in excess of 100kbs, reportedly. The way it was explained to me, their service can currently provide speeds to mobile devices that would compare to a wired connection. In a short time, once the network is set up nationwide, they will be providing speeds that exceed anything currently available on the market.
The interesting part about this company, and why it’s a spec play for us, is not that the idea is revolutionary, although after research, we found that it is deemed that this is the future of internet service, it is more the companies that have invested in Clear that make this a stock pick for us.
With some digging, we found that Google is at the top of the list, followed by others like Microsoft, Hulu, and others. In fact, earlier this year, when we posted GOOG as a pick because they had so much money available for research and development, we were not shocked to hear that GOOG had invested in this company. The total amount between the investors is a reported 15 Billion. Money which is planned to build and expand the infrastructure across the nation within the next 2 years.
As the information about the investors is not readily supported by the information on the Investor Relations part of their site, we can only categorize this as a spec play, but if in fact that information gets released, or is readily available somewhere at some time, it could mean big jumps for the stock. Regardless, after evaluating their business model, and seeing the amount of capital that is backing their marketing campaign, and researching and understanding their “4G Wireless Internet Network”, we feel that they are light-years ahead of the currently existing networks available for public consumption, and with a price point that makes it attractive to consumers, it is a matter of time before people start to try it out and switch.
With new markets opening up in Chicago, Dallas, Boston, NYC, and others in the next 3-6 months, we see quarter revenue growing for the next 3-4 quarters, with evaluations placed at each interval.
We like the stock where it is, in the low $6 range, and can conservatively speculate that the stock could reach $30 in the next 12 months. Our price point is at $30.
To start your own research on the company, visit the websites listed above and start digging… and then use their store locator to see if there is one near you, and go and interrogate a salesperson for more info.
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