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slade15342 (95.97)

Microvision Makes Your Tiny Phone Appear Huge

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July 18, 2008 – Comments (1) | RELATED TICKERS: MVIS

Microvision

        

Where is the future of the cell phone market going? There has been a large push recently to display the next big thing at technology shows to show us what future cell phones will look like.  Pretty soon the Zoolander phone could be a reality.  But is smaller what we really want?  A couple of years ago the idea was to make a basic phone as small as possible.  Now the new crave is to put everything in your phone that you would normally need in all of your pockets, and to make it the perfect size so that the average person with normal vision can watch a movie or a video podcast on the train.  So with this new wave of multifunctional phones comes the technology that drives it.  While there may be phones that are slap bracelets in the next 5 years, there is one certainty.  Microvision will be a major player in the cell phone market as a producer of Pico Projector Displays.  Motorola is working in conjunction with this company to produce next generation cell phones that are able to project your movies, videos, and presentations to large audiences without having to huddle around a 3 inch screen.  Which would be great to play the Nintendo Wii as shown below.  
Wii with Microvision


But let's not stop with what Microvision is doing with cell phones.  They received a $3.2 million grant from the US government to create wearable headsets for our soldiers that would give them next generation vision of enemies and surroundings while in the field.  This is not only potentially profitable for the company, it is more importantly going to save lives and ultimately government money because of more targeted attacks and less wasted ammo.
Microvision for the military
So what happens if you have a tray full of Dunkin Donuts coffee for your office in one hand and your'e on the cell phone with the other and you want to do more.  Well you're in luck.  If you were wearing Microvision's Mobile Eyewear, you could also follow GPS to where you were going in real time, check the weather, your portfolio, and maybe even read The Geared Investor (what?  I had to try).   It would be even better if these glasses looked like normal sunglasses.  Maybe they could team up with Ray-Ban and makes something fashionable.  
Microvision sunglasses
They are also working on automobile displays, adding yet another element to their projection technology.  I'm sure the automobile displays will also be linked with audio, as will the visual headsets for the military and personal use for efficient data transmission.  Good news!  Microvision is also a publicly traded company on the NASDAQ under the symbol MVIS.  At this point I haven't checked out the fundamentals of the stock, so you should definitely do that before even thinking about this company as a potential investment.  I merely think their technology is going somewhere, but I will not think about this myself until I see consecutive quarters with decent growth.  This stock is currently trading at $2.45, with an all-time high of around $70 at the beginning of 2000.  

So now you know the next big thing to hit the cell phone market.  Any bets on whether or not it will make it to the iPhone?

1 Comments – Post Your Own

#1) On July 18, 2008 at 12:53 PM, ricoy5 (25.80) wrote:

nice summary... the 'soft summary' of what a company does is always my favorite jumping off point... and sometimes the hardest to find.  Since you started there, I ran a quick summary of the fundamentals...

MVIS is a micro-cap with 57M shares out, and just under the threshold for CAPS with a $142mktcap, and very low insider ownership...   

Looking back 10 years... MVIS has not turned a profit, although they are inching towards it with a TTM EPS of -$0.33

MVIS has a projected 5yCAGR of 20%, but with negative earnings does not compute a PEG.  5y avg ROE & ROA is -14.4% & -42%... and obviously a negative net margin.  They do have a DE ratio of 1.9% going for them.

Since most intrinsic value calcultions either project EPS growth, or discount FCF... I can't give a number... but the trends can be commented on. 

Operating cash flow seems pretty level at -20M or so... with CAPEX also steady at about a Mil...  Revenues seem pretty stable at around 10M,  and they do report a gross profit on those sales.  They have $14M in Cash and $15M more in short term investments... their AR, Inventory and other current assets are all very low. 

While SG&A & RD are about 16M a year, each... they don't seem to be growing.  They raised nearly $70M in equity between 06&07... which still didn't overcome the low net income start to the cash flow stmt...

Not a pretty financial picture, but if they can monetize some of those advances that slade listed above (without eating it up with SG&A)... then maybe they can turn a corner. 

Or maybe they'll be gobbled up...

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