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25
AirIQ stock price could double again
Posted by: Gerry Wimmer
9/25/2016
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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.

Last 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.

At the 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.

AirIQ 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 shareholders.

AirIQ has approximately 28.9 million shares outstanding.

The Company's website: www.airiq.com

Author's share ownership disclosure: IQ - Yes


Read Disclaimer:

This 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 article is subject to change without notice, and the author assumes no responsibility to update the information contained in this article. The information contained within this article should not be construed as offering of investment advice. Those seeking direct investment advice, should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock.

Investorfile.com 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.

The author of this article has acquired and may trade shares of AirIQ Inc. through open market transactions and for investment purposes only.

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Gerry: Thanks for small cap stock suggestions over the past 5-years. Your record is very impressive and your analysis has been excellent over the years. I think small investors (and fund managers) should pay much more attention to your work. I look forward reading your blog over the next 5-years!