The news of China approving Google Inc.’s (Nasdaq: GOOG) $12.5 billion purchase of Motorola Mobility Holdings might not be the money making news on Monday. Zoom Technologies Inc. (Nasdaq: ZOOM) stock jumped 88.35% in April when they announced the release of their 10-K and Q4 results. Shares in ZOOM stock traded 5.23 million shares April 13th, just one day trading session before the earnings release. This time, investors are being more conservative in trading the penny stock since the Company reported a Q4 2011 net loss of $2.0 million, compared to net income of $5.1 million in Q4 2010. The effect: Diluted EPS for fiscal 2011 of $0.15 compared to $0.97 for fiscal 2010.
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ZOOM Stock Chart:
Market Cap: 26.79M
Enterprise Value: 85.30M
Trailing P/E (ttm): 7.40
Price/Sales (ttm): 0.09
Price/Book (mrq): 0.34
(May 23, 2011): 3.33
(Nov 29, 2011): 0.74
Avg Vol (3 month): 259,008
Avg Vol (10 day): 105,112
Shares Outstanding: 24.13M
% Held by Insiders: 42.73%
Zoom Technologies is set to report Q1 earnings after the closing bell on Monday. When Zoom Technologies reported Q4 and full year 2011 results in April, investors jumped in advance of the results. The Company generated net revenue of $139.0 million, up 60.6%, compared to $86.6 million for Q4 2010; and up 173.9% sequentially, from $50.8 million, in Q3 2011. The jump in revenues in Q4 was mainly due to:
i) significant increase in sales of the Company’s Leimone brand phone to 1,278,000 units just in Q4 vs 554,000 units in total for the first three quarters combined, and
ii) the Company’s newly acquired subsidiary in New York, Portables Unlimited LLC. Portables Unlimited, a wholesale distributor of T-Mobile USA products and services, from September 15 to December 31 contributed $13.5 million in sales.
For the full year of 2011, the Company reported revenue of $306.4 million, up 21.3%, compared to $252.6 million for the full year of 2010. The year over year revenue growth was primarily attributed to the increase in sales of the Company’s Leimone brand phones.
So, is ZOOM stock worth adding to the list of penny stocks to watch?
Two things to consider:
• Subsequent to the year ended December 31, 2010, Zoom Technologies through its wholly-owned subsidiary in Hong Kong, Profit Harvest, acquired 100% ownership of Celestial Digital Entertainment, Ltd., a mobile platform video game development company based in Hong Kong for 484,800 shares of ZOOM Stock at no less than $3.75 per share. Celestial primarily focuses on development of video games and applications for mobile phones and mobile platforms. Celestial has developed over 40 titles for the Apple Inc. (Nasdaq: AAPL) iPhone and is one of the largest developers of iPhone apps in Asia. The acquisition transaction closed on January 4, 2011, and Celestial became a wholly owned subsidiary of Profit Harvest.
• On October 12, 2011, Zoom Technologies acquired a 55% share of Portables Unlimited LLC, one of the largest exclusive wholesale distributors of T-Mobile products in the U. S. Portables has direct access to more than 1,000 retail locations across 20 states selling T-Mobile products, including approximately 100 exclusive T-Mobile carrier locations.
About ZOOM Stock
Zoom Technologies is a holding Company with subsidiaries that engage in the manufacturing, research and development, and sale of electronic and telecommunication products for the latest generation mobile phones, wireless communication circuitry and related software products. The Company’s subsidiary, Jiangsu Leimone, owns a majority stake of TCB Digital, which offers highly customized and high quality Electronic Manufacturing Service for Original Equipment Manufacturer customers as well as its Own Brand Manufacturing under the ZOOM, LEIMONE and LONGTEL brand names. The Company’s products are both exported and sold domestically in People’s Republic of China.
To view the SEC filings for ZOOM stock, click here.
Bottom Line: Short or Long, ZOOM stock should be added to the list of penny stocks to watch on Monday and for the remaining 12 months to review the Company’s Q filings. The Company made three acquisitions since January 2010 that could begin to pay off big on top of the quarterly growth Zoom Tech has been experiencing. ZOOM stock had a high of $8.95 in Q1 2010. If the pps returned to half that, you’re looking at a 303% gain.