Top Growth Stock For The Month, page-2

Looking back five years

3 SMALL CAP STOCKS WITH BIG POTENTIAL


By Tony Featherstone | 11.03.2013

A new player, Nearmap, remains under the radar despite rallying from a 52-week low of 3 cents to 11 cents. Its main asset, nearmap.com, provides high-resolution photos of Australian property and licenses it to government agencies and private companies through subscription models.
I’ve seen property agents use it to promote houses, and the service has commercial application in industries such as roofing, construction and building. Local governments must love the ability to peek on residents who do dodgy renovations or rebuild without council permission. The service should have applications in a range of industries that need aerial views of properties.
Unlike Google Maps, which seems to use the same dated images forever in some cases, Nearmap adds new photo maps for Australian capital cities every month. Higher-resolution images and tools to measure distance and area for a property – from your desktop – are other features. Users can also track and measure changes over several years to follow the development of areas or projects.
It is a good idea in principle, although I doubt home owners like the idea of having high-resolution images of their property taken. Nearmap is just starting to ramp up sales off a tiny base: new digital subscriptions boosted revenue by 51.3 per cent to $4.03 million for the December half. The net loss – expected at this stage of the company’s evolution – was $2.64 million, an improvement on the $3.87 million half-year loss a year earlier.
Nearmap had no net debt in the December half and its cash balance swelled to more than $9 million in February 2012 due to patent payments. Strong cash-flow growth, no debt, and recurring subscription revenue are excellent qualities for emerging technology companies.
Nearmap’s $36-million market capitalisation  has already factored in strong revenue growth. My guess is it will eventually be acquired by a large property advertising company that can distribute its photo-map service to a much larger audience. Nearmap has an interesting product; it just needs the distribution. As an emerging technology stock with low liquidity, it should be considered speculative.

http://www.thebull.com.au/articles/a/36242-3-small-cap-stocks-with-big-potential.html