Novatel Wireless (NASDAQ:NVTL) has had a rough year. The San Diego California based company provides a number of wireless broadband entry solutions for the worldwide mobile communications market. They offer up a menu of products such as Third Generation (3G) Wireless PC card modems, embedded modems, ruggedized and communications software. Key customers include wireless operators and technology solutions providers, such as Sprint Nextel Corporation (NYSE: S), Dell (NASDAQ: DELL), and AT&T Inc. (NYSE: T).
The past five years have seen shares slowly but steadily fall and investors in Novatel have felt the pain. Shares started the New Year trading at over $3.60 and bottomed out at $1.17. Just last month shares reached a 52 week low and analysts were decidedly pessimistic about buying into the company. Novatel also reported weak financial results for the third quarter of 2012. On the plus side the company posted Q3 EPS of $0.27, $0.05 better than the experts estimate, but revenue for the quarter came in at disappointing $71 million versus the consensus estimate of $78.8 million. To add insult to injury, the company was recently removed from the S&P 600 because of its low market capitalization.
However, things appear to be turning around. Over the past two weeks the stock is rebounding nicely and is one of today’s best performing low-priced stocks, up almost 5% for the day trading at $1.39. Shares have outperformed the Dow and outperformed the S&P 500 during today’s trading. So far, 547,687 shares have traded versus an average volume of 439,000. Larger competitors such as Electronics For Imaging Inc. (NASDAQ:EFII) and LG Digital Display Company Ltd. (NYSE:LPL) are not faring nearly so well. LPL shares are down by $0.27. EFII is showing a loss of $0.22 at the moment. Novatel Wireless has a potential upside of 19.5% based on a current price of $1.39 and analysts’ consensus price target of $1.61.
Part of the boost in the company’s value can be attributed to the October release of MiFi 2. It is described as a next-generation intelligent mobile hotspot. MiFi is a mega portable wireless gadget that generates an environment of high-speed Internet connectivity that can be easily shared between multiple users and Wi-Fi devices. The ground-breaking MiFi 2 is the first touchscreen smart mobile hotspot offered in the market. This coupled with the big boys that Novatel has partnered with could be the right combination to push the struggling business into its own. This one is worth a hard look.