Small-cap fight of the week: Sonic steps into the ring
Today's Financial News - Posted June 9, 2009
Fighting to find a home in your living room is tough business, but the winner could be sitting atop a mountain of profits in the next few years. Investors are starting to believe Sonic Solutions (NASDAQ:SNIC) has a shot at the prize.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): Double your money in four days. It sounds like some sort of hyperbolic sales pitch, but it is the kind of stuff small-cap investors are constantly searching for.
This week, they found the gains from a tiny company called Sonic Solutions (NASDAQ:SNIC). Last Tuesday, shares were trading for $1.60. Today they are closing in on the $3.00 level.
Why the big gains out of such a little company?
The surge comes thanks to investors pondering the notion Sonic has entered the big leagues… and the company’s CEO tapping Nasdaq’s opening bell – that never hurts.
In an industry filled with giant brands like Netflix (NASDAQ:NFLX), Comcast (NASDAQ:CMCSA), TiVo (NASDAQ:TIVO) and Blockbuster (NYSE:BBI), dealing with the competition can be tough business, especially with a market cap of just $75 million.
But the media software provider appears up for the challenge. If the company truly can compete, today’s shareholders are going to be much richer in just a few years.
We have all heard about the battle for you living room. Companies like Netflix, TiVo and Blockbuster are doing everything they can to bring downloadable videos to your television set through an inexpensive and easy platform.
Easier than setting the clock
But most of the technology requires you to have yet another clunky box plugged into your TV set. That is where Sonic is hoping to beat out the competition. By putting its download-to-own software inside Blu-ray players made by LG Electronics and by making it available on devices sold by BestBuy (NYSE:BBY), Sonic can sneak into living rooms without viewers ever noticing it.
If downloadable movies are ever going to create an industry-wide footprint, this is the sort of technology that will lead the way.
The big question is will one of the competitors do it better, faster and more effectively? Or will Sonic and its Roxio technology leapfrog to the head of the class?
Over the past several years, Sonic’s share price has steadily fallen. In 2005, investors would have had to pay close to $25 for shares that are stretching to reach $3 today.
But over the past six months, share price has been volatile and rather predictable, making the stock a prime target for in-and-out traders.
My advice, start doing your due diligence and be prepared to buy on any future dips. Sonic is the middle of a red-hot industry that is only going to get hot as it figures out what technology will propel it into the future.
Hopefully Sonic is part of the long-term game plan.
Next Article: Russia dumps the dollar, commodities surge
Be the first to leave a reply.
Your comments are welcome
Follow TFN via RSS or Twitter |
 |
 |
 |
Advertisement
Latest Headlines
- The Big Picture for Sinobiopharma, Inc. (SNBP)
- Beazer Homes USA, Inc. (BZH) and Hovnanian Enterprises, Inc. (HOV) up despite horrid housing news
- The FDA catalyst: 2010 moves in MannKind (MNKD), Roche Holding (RHHBY), Acorda Therapeutics (ACOR) show it still works!
- Steepest drop since Feb. 2009: Here we go again!
- Is the silver run over? Coeur d’Alene Mines (CDE), Silver Wheaton (SLW), Alto Group (ALTO), Hecla Mining (HL), Endeavour Silver (EXK) close down