Thursday’s Low Float Alert *SGSI* Displays Spectacular Upside Potential
Does “telecommunications” ring a bell? It should. One my recent monster gainers, FTE Networks Inc, (FTNW), is in the same sector.
If you weren’t signed up to Stock Wire News when I released FTNW previously on January 14th, it moved from $2.49 in price per share to a high of $4.44 on February 26th.
That run of nearly $2.00 could have netted a SWN followers an approximate 78% in gains!
Now, we’re jumping back into this sector with SGSI, and another opportunity at a potential monster gainer.
1G, 2G, 3G, 4G… 5G?
In case you don’t know what I’m referencing, let me give you a little hint. I’m referring to the different generations of wireless mobile telecommunications technology.
With 5G being a huge internet buzzword, President Trump recently tweeted last month that he was looking forward to 6G technology coming out sooner then later in the United States. With his tweets, it appears he almost issuing a challenge to US companies.
Though 6G doesn’t even appear to be in the works at the moment,5G will be the next big breakthrough as telecom companies in the US and the world look to make significant rollouts throughout 2019 and 2020.
According to a research report from Research and Markets in June of 2018, “the global 5G market is forecasted to expand at a CAGR of around 97% over a five-year period and will reach a value of USD 251 Bn by 2025.”
Why is this important?
Spectrum Global Solutions, Inc. (OTCQB: SGSI) is the holding company for next generation technology companies specializing in Telecommunications across the US, Canada and Caribbean. Through their subsidiaries, AW Solutions, Inc., AW Solutions Puerto Rico, LLC., Tropical Communications, Inc., ADEX Corporation, ADEX Puerto Rico, LLC and Telnet Solutions, Inc., they are a leading provider of comprehensive outsourced services, professional services and solutions for the turn-key deployment and maintenance of next generation and legacy wireless and wireline telecommunication networks and infrastructure.
And long story short, things have been going pretty-darn-well for this company. Just take a look at this recent press clipping:
Spectrum Global Solutions Receives Over $5.8M in New Contract Awards
LONGWOOD, Fla., Feb. 21, 2019 (GLOBE NEWSWIRE) — Spectrum Global Solutions, Inc. (OTC: SGSI) (“Spectrum Global” or the “Company”), a single-source provider of end-to-end next-generation wireless and wireline network solutions and professional services to the service provider (carrier) and corporate enterprise markets, today announces that year-to-date it has received over $5.8M in new contract awards to support carrier network upgrades.
“The new orders add to business obtained in 2018 that we have on deck for completion this year,” stated Spectrum Global CEO Roger Ponder. “We anticipate that the new contracts – paired with the unique services, solutions and technology brought into the business through our pending WaveTech merger – will result in greater value to Spectrum Global and the combined entity.”
As previously announced, Spectrum Global’s merger with WaveTech Global Inc. will create a consolidated entity valued at more than $130M.
That’s a pretty good start to the year, and if their revenue continues to increase like they have recently, SGSI could be in for a monster 2019.
In 2017, SGSI saw approximately $10.7M in revenue and projected to see roughly $32M in revenue in 2018 according to their investor deck. With a strong start noted above, they could be in line to push past last years’ revenue numbers and continue their uptrend.
It wouldn’t be much of surprise if this happens as SGSI reports that their market is in “growth mode.” They also report from their investor deck about their market:
INCREASED FIBER CONNECTION
- $130.0 B to $150.0 B in new fiber investment 5-7 years (Deloitte)
INCREASED WIRELESS COVERAGE
- 5G, 300,000 new sites
- FirstNet, 20,000 –40,000 new sites nationwide
- Dish Network, 30,000 –50,000 new sites
- FCC to auction new Spectrum for carriers / services
- 4G Maintenance and upgrades of 190,000 sites
- Small cell deployments – 849,000 new sites
- IOT & BYOD technology explosion
- Enterprise & Private new networks
Opportunities to generate revenue appear abound and ripe for the taking!
From a technical standpoint, SGSI could act like some of our other alerts for SWN. Why?
It has a low float share structure! According to Yahoo Finance, SGSI has only 2.63M shares in its float. A number this low can lead to the type of volatility we saw in recent winners:
- OCX (7.83M shares in float) ~$3.23 to $6.92 in same session.
- TNXP (1.17M shares in float) ~$6.70 to $9.60 in same session.
- ADIL (4.47M shares in float) ~$2.50 to $4.25 in same session.
That isn’t to say that SGSI will move multiple dollars like these previous plays, but you need to be cognizant of the fact that a low float share structure can lead to volatile shifts in a ticker’s share price in the short-term.
A brief look at SGSI‘s 9-Day and 14-Day Relative Strength Indices will show them to both be below 45% which means they lean towards oversold territory and a good distance from overbought territory. That means there is significant potential room for growth.
Other technicals leaning towards oversold territories are the 14-Day Williams #R and the 14-Day Raw Stochastic.
When you lump knowledge of these multiple short-term technicals leaning towards oversold, it starts to allow you to draw a picture of a ticker that could be due for a healthy reversal.
And as I stated early, with a low float in play on SGSI, a slight uptick in price per share could lead to an even grander move if traders are locked in on this potentially volatile alert.
More about Spectrum Global Solutions (SGSI)
Spectrum Global Solutions have successfully executed on projects across the United States and internationally. We provide cost-effective, scalable and robust solutions for communication carriers, utilities, enterprise clientele, OEMs and professional service companies.
- They are a comprehensive, single-source provider for the development, deployment and maintenance of network infrastructure
- Their Services range in scope from a single activity, to multi-year, multi-region large scale turnkey development contracts
- Their experience encompasses national/international programs worth over $1.5 billion, management of 1500+ staff
- They are professionally registered in 49 States, 3 US territories (Puerto Rico, USVI, Guam), 6 Canadian Provinces in support of our clients.
- PROVEN OPERATOR IN THE HIGH-GROWTH telecom infrastructure and Enterprise Solutions market
- ONE OF THE FEW ENGINEERING, PROFESSIONAL SERVICE AND INSTALLATION COMPANIES able to provide a full suite of telecom and enterprise services and the ability to bundle its services for telcos, all delivered by highly-experienced engineering teams
- PROVEN TRACK RECORD with top-tier Fortune 1,000 companies worldwide
- REPLICABLE, SCALABLE SERVICES MODEL supported by industry-recognized strategic partnerships
- EMBEDDED CUSTOMER RELATIONSHIPS FOSTER REPEAT CUSTOMERS at minimal customer acquisition costs
- PROFESSIONALLY REGISTERED IN 49 STATES, 3 US TERRITORIES (PUERTO RICO, USVI, GUAM) AND 6 CANADIAN PROVINCES
- INTERNATIONAL EXPERIENCE IN ASIA AND CENTRAL AND SOUTH AMERICA
- PROVEN, EXPERIENCED MANAGEMENT TEAM with extensive industry, sector and public market experience