Stock In Focus: Now Corporation ($NOW) as of 04.04.16

Now Corporation (pse symbol, NOW) has been the recent talk of the FB fora and online community due to its rising stock.  In the whole month of March 2016, the stock has an average price of P0.86809 per share when it was gradually moving up as high as P1.83 and closed at P1.72 per share as of April 4, 2016 with the current 7.7M shares on the bid side.

What’s in it for $NOW?

For those readers who are not familiar with the Company, Now Corporation (NOW), formerly Information Capital Technology Ventures, Inc. (ICTV), was originally incorporated on June 5, 1996 as MF Schroder & Co., Inc. to engage in the purchase and sale of securities. It was renamed Cashrounds, Inc. with the primary purpose to engage in the business of securities brokerage through the use of information technology and later renamed, ICTV.

In 2013, It was renamed Now Corporation with primary purpose into telecommunications, media and technology, these include telecommunications to engage in wired and wireless, fixed and mobile telecommunications.  The Company brands are NowPlanet TV and WebsiteExpress Biz.  NOW’s business partners are NOW Telecom Company, Inc.; The International Business Machines Corporation; and The Asian Institute of Journalism and Communication, Inc.

Stock Strong Sentiment

The strong sentiment of the stock is probably due to the following as per PSE disclosure:

  1. On October 14, 2015, the Company launched (a) the “NOW Broadband Cable TV” a guaranteed broadband Internet service with Wireless Cable TV, and (b) the “NOWPlanet.TV” a digital media platform as a product that converges free TV, web channels, cloud services and other interactive services. The Company also launched a website (www.nownetwork.ph) dedicated to this service. The first of its kind in the Philippines, the Company’s broadband Internet service offers only broadband Internet at guaranteed speed with wireless cable TV broadcast and cloud services. This means clients could now rely on minimum bandwidth from 2 megabit per second to 1.4 gigabit per second. Times Plaza Building along UN Avenue in Manila and Angelicum College in Quezon City are among the first customers that are now enjoying these services.

  2. On March 29, 2016,  the Company  reported that the preliminary year-end total revenue for 2015, the Company hit positive net income for the first time after years of mergers and acquisitions mainly attributable to the Company’s existing businesses namely IT Resource Management and Software Collaborations.

  3.  The Board also discussed the five-year business plan earmarking a capital expenditure of about USD50 million for its broadband and wireless cable TV business with projected revenue of USD346 million at the end of the five-year period with a net income of USD120 million by the end of the five year-period

Speculative Numbers on Fair Value of the Stock

  1. On Jan 30, 2015, the Company plans to increase its the authorized capital stock from Php1.32B with a par value of Php1 per share to Php2.12B with a par value of Php1 per share or an increase of Php800M.
  2. By assuming the 2.12B are issued common shares as per Jan 30, 2015 disclosure on increase of authorized capital stock) based on USD 120 million by the end of 5-year period.:

 

Now EPS

I could not imagine the fair value of the stock if the business plan of Now Corporation at the end of the 5-year period will be achieved.

Although steps have been taken with the initial plan of fundraising initiative to wit:

Listed IT company NOW Corp. is in talks with two local investment banks to raise $50 million over the next two years to fund plans to shift its revenue stream to the fast-growing corporate broadband market. The company would decide in the next few months on its fundraising options, which include a combination of debt and a follow-on offering.  He declined to name the banks, but said the initial tranche would involve $30 million this year while subsequent amounts could be raised through 2017. The plan was in line with a five-year strategy that covers this year until 2021. The fresh funds would be used for the company’s broadband and wireless cable TV businesses.

Current Technical Chart In Longer Time-Frame:

With the current strong sentiment of the stock, a breakout of 2.0 will open the blue skies towards 3.15 with minor obstacles at 1.80/1.83 and 1.90.  Take note of the trend-line with strong support level near 1.72 & 1.70 area.  For the past few days, all-time high resistance levels have been breached.  Traders and investors are looking forward to updates on annual report in 2015, fundraising initiative and other surprises in the future 🙂

NOW as of 4 April 2016

I almost forget to mention – please identify your trailing stop.

Disclaimer: This article is for information purposes only. There are risks involved with investing including loss of capital. The information provided in the website is only an opinion of the author and  does not constitute as legal advice, research or recommendation to buy or sell any securities

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