This 5G player is forecasted to grow at an annual rate of 20% over the next five years.
Inseego Corp. (INSG)
From Ian Wyatt’s Million Dollar Portfolio
5G is a major upgrade to wireless networks, running up to 100 times 4G network’s speed and enabling many cutting-edge technologies. It also has extremely low latency, or the delay that occurs when transmitting data. It can also carry more data more reliably, enabling up to 1 million connections per square kilometer compared to the 1,000 connections that 4G can handle.
The Internet of Things is another important driver of the 5G revolutions.
5G is also going to give cable companies a run for their money. For more than a decade now, cable companies have been the major internet service providers in the U.S., offering broadband service across networks that have been tough to replicate.
But the 5G network offers speeds that surpass those offered by even top-of-the-line fiber optic networks. And, using mobile networks, they can reach homes that aren’t (and can’t)
be wired for broadband because of their remote locations.
Inseego Corp. (INSG) sells fixed and mobile 5G hotspots and routers for both home and commercial use, which are replacements for existing broadband connections. It also offers Ctrack fleet management technology, which tracks the location of tractor trailers, firetrucks and even airplanes. Its Device Management Systems technology is used to track mobile devices, like phones and laptops.
The company has scored some big wins, recently being selected by a major provider in the Asia-Pacific region to supply its 5G Home Router to customers. Inseego was also recently selected by Verizon (VZ) to provide its MiFi M1000 hotspot to the telecom. The MiFi is so fast, it supports 4K/8K video streaming (with download times measured in seconds) and virtual reality applications. It essentially brings speeds once only available to business to any consumer at an affordable price. That’s a major competitive advantage in the device market.
Inseego isn’t profitable at the moment, mostly because the 5G revolution is just beginning to take off. But it expects to bring in full-year revenue between $50 million and $56 million this year. I look for revenue growth to only pick up from here, since as of June there are 224 network operators in 88 countries working to implement 5G networks. At the end of 2018 there were 134 operators in 62 countries working on 5G. That’s creating huge new markets for Inseego’s products every day.
And while Inseego isn’t profitable yet, with a roughly 30% gross operating margin, it could be if its revenue growth continues apace. The market isn’t giving the company much credit for its potential, though, even though most Wall Street analysts look for its revenue to grow roughly 20% a year over the next five years. That would value Inseego’s stock 80% higher than it is trading today.
Buy Inseego up to $8.
Ian Wyatt, Ian Wyatt’s Million Dollar Portfolio, www.wyattresearch.com, July 26, 2019