Friday, March 08, 2013

HOW MY CURIOSITY ABOUT 3 SMARTPHONE APPS GOT ME A TRIPLE-DIGIT GROWTH STOCK


This is a story about how my effervescent curiosity led me to a little-known small company that may become the IBM of mobile application software in as little as five years.

Before i pick the stock of a company as a long-term investment i always do some fundamental research.

Sometimes, however, i go with my gut instinct first. I do this when the company I'm investigating is in an industry i perceive to be "futuristic" and highly growth-oriented.

This gut feeling got me into the stock of Chinese mobile security firm NQ Mobile Inc. (NQ), already up 66% year-to-date (YTD) as of closing yesterday.

There's no doubt that the future is mobile.

Therefore, for the past year i was already on the prowl for a stock to ride this hot global trend of mobile consumption like a horse whisperer. I didn't think it would be Microsoft (MSFT), which i dumped two months ago.

One day in October 2012 i noticed an in-app cross-selling ad linked three of the apps i used the most on my android phone. This aroused my curiosity so i dug deeper.

Boom! Lo and behold, the three apps - NQ Mobile Security, NQ Mobile Vault, and NQ Android Booster - were made by the same developer.

Wow, i reasoned, since these three apps did what they were supposed to do excellently, their developer must have an ace up its sleeve.

I quickly googled NQ and read EVERYTHING i could find on the company. I was even tempted to call China or a Chinese friend to ask about the company.

Luckily at the time, NQ was just over a year old as a publicly-listed company and was trading well below its IPO price. I thought that was weird because all my research indicated this young company was going places in an industry that was exploding.

I jumped into the stock without delay and now this small-cap tech company is 6% of my portfolio and already my biggest percentage gainer YTD.

I suspect NQ Mobile will eventually become the IBM of mobile security or it will be snapped up in the not-so-distant future.

Fellow stockmarket investors, you don't need your commissioned stockbroker to pick stocks.

Just tune in to changes around you and around the world. Then pick companies you believe are best positioned to exploit these changes going forward.

With a little intuition you can find a gem in the rarest of places.

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