TOP IDEAS: AirIQ Inc’s (TSXV:
IQ) stock value is up 112%. But the best is yet to come as the Company delivers
on new Global Positioning Service contracts.
Fiscal 2017 is off to a good start for
shareholders of AirIQ Inc. (TSXV: IQ – C$0.17). The Company reported last month
that first quarter revenues are at their highest levels in over six years and
since its turnaround at $923,000. With the revenue growth, Earnings before
Interest, Taxes, Depreciation, Amortization and Stock Options (EBITDAS) were up
19% to $127,000 with a net profit $72,000.
AirIQ has been providing Global Positioning
Service (GPS) solutions for over 15 years to customers throughout North America. The Company has an intuitive web-based
platform that provides fleet operators and vehicle owners with a suite of asset
management solutions to reduce cost, improve efficiency and monitor, manage and
protect their assets. Services are available online or via a mobile app and
include: instant vehicle locating, boundary notification, automated inventory
and maintenance reports, security alerts, electronic logging and vehicle
disabling and unauthorized movement alerts.
In 2016, the GPS industry is undergoing
change as most GPS solution providers for mobile assets must make the
transition with their customers from 2G to 3G service, thus the termination of
legacy 2G GPS units and airtime contracts in the US. AirIQ undertook the task of proactively completing the
2G to 3G transition for its current customer base last year, well ahead of most
competitors, and today the Company’s focus is on new customer wins.
That said, AirIQ recently announced a major
new customer win with a large (unnamed) US construction company. Under a
blanket order, AirIQ will initially supply this customer with 1,000 GPS units
for delivery in 2016, with the possibility of add-on orders in 2017. As a
result of this contract win, AirIQ begins earning recurring monthly wireless
airtime fees from the connection of 1,000+ GPS hardware devices that are sold
to this customer and activated.
week we visited with the Management and Directors of AirIQ at its Annual
General Meeting (AGM) held at the Company’s head office in Pickering, Ontario.
From the AGM we have come away with the opinion that the Company has a very
strong pipeline of customer opportunities which could develop into several new
GPS contract wins within the coming months.
AGM, Management presented how AirIQ is broadening its product and service
offerings and therefore is better positioned to win larger GPS contracts from
bigger customers. The expanded offerings in part are tied to certain software
assets (and a development team) acquired from Timeout Studios, Inc., a Canadian
mobile web application company, in May 2016. AirIQ Management said the new
software was instrumental in its latest contract win.
is executing on a number of strategic fronts, which will lead to strong
financial performance in fiscal 2017. We continue to recommend that small cap investors should
accumulate the shares of AirIQ up to a price of $0.20. The Company’s Management
has demonstrated that it can grow its business profitably and, therefore, we
speculate that there will be more profit growth as AirIQ scales up its
operations from new contract wins.
We recognize that
AirIQ’s stock price is already up 112% (more than doubling its value) since the
Investorfile blog first recommended the purchase of the Company shares as one
of our Top Ideas in November 2015 (See: AirIQ is a
technology company small in size but the stock is big in value.) But we can envision a valuation scenario in 2017 that could cause the
price of AirIQ shares to double from its current value. As such, the Company’s
stock price would far exceed our accumulation target and would be a big win for
AirIQ has approximately 28.9 million shares
The Company's website: www.airiq.com
Author's share ownership disclosure: IQ -
article is for informational purposes only. This article is based on the
author's independent analysis and judgment and does not guarantee the
information's accuracy or completeness. The information contained in this
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is not engaged in an investor relations agreement with AirIQ Inc. nor has it received any compensation from AirIQ Inc. the preparation or distribution of this article.
of this article has acquired and may trade shares of AirIQ Inc. through open market transactions and for investment purposes