Call Me Maybe?

I have been thinking about stock picks for my November 15th MFI tranche.  This has been a very successful tranche, up 41.5%, led by VIAB - up over 70%.

One stock that has caught my eye is one of the most advertised products on late night TV - MagicJack (CALL). Of course it is always a little dangerous investing in a company with just a single product, but they are a low-cost leader and have a great opportunity to expand Internationally.

When I look at them, they are trading at $13.45. They are expected to earn $1.87 for the year ending December 31st and $2.04 in 2014.  They do have an ugly balance sheet, they actually have a negative book value.  One nice thing about their model is the more of the product they get out there, the more they get in recurring fees.  I use Skype, which works well when I travel internationally.  But the idea of being able to hook up a real phone is nice.  If you live in the states, have a good internet connection and want to save some money over a landline, you could pay the $20 a year and simply have a spare computer at home with a MagicJack and a phone.  I did have Vonage for about 4 years while I lived in Bermuda.  It was great being able to have a US number (helps with credit cards, having friends call you etc). But it was like $25 a month and was a bit of a hassle to set up. So I think there is a real market for MagicJack.

More ideas to come....