This Tiny Company's Technology is in Your Pocket Right Now

Millions of Americans are going mobile with their Internet access. We're increasingly relying on mobile devices for all sorts of activities, but growth in Internet access is downright staggering.

Last spring, a survey by the Pew Internet and American Life Center found that 40 percent of adults used their mobile phones to access the Internet, e-mail or instant messaging. This represents an 8 percent increase over the prior year.

Another Pew survey found that before the November midterm elections more than a quarter of adult Americans used a cell phone to find out about, or participate in, the campaign,

In early November I briefly discussed Motricity MOTR, one of the hottest IPO stocks of 2010. The company provides mobile solutions for the wireless market.

Early after its IPO Motricity (Nasdaq: MOTR) tripled from its IPO price of $10. It rallied to over $30 then fell fast and hard to $18. I chalk up the volatility to a young stock that offered some extremely attractive profit-taking opportunities for early investors.

Still, the stock finished 2010 with an 86 percent increase, not too bad at all.

Motricity went public in June, but the company actually began a decade ago. It has a long track record offering wireless carriers and enterprises the hosting services needed to deliver mobile data. Over the last ten years it has been able to refine its business model several times to pursue opportunities in a rapidly evolving industry.

Motricity is now well-positioned to take advantage of that sometimes esoteric concept of "cloud computing," and it is branding itself as a cloud-based, mobile-as-a-service company.

Content is king, especially for mobile activities. Motricity has you covered, whether you're using Apple's (Nasdaq: AAPL) iPhone, a BlackBerry from Research In Motion RIMM or an Android-powered device.

The company's services work over networks from AT&T (NYSE: T), Verizon Wireless VZ, Sprint (NYSE: S) or T-Mobile USA DK. All four carriers are customers, as are content giants CNN, Showtime, the History Channel and the Home Shopping Network (full disclosure: I currently own shares of Apple and Verizon in my investment account).

So if you have a cell phone from one of the above carriers you probably already use this company's technology. The question is: should you own their stock?

Let's look at some of the numbers...

Motricity says that in the past five years, its carrier customers have generated more than 60 billion page views and $2.7 billion in gross revenue from the sale of mobile content and applications.

It attributes much of the business to its anchor mCore Platform. More than 13,000 different mobile phones can access the wireless data services - 75 million pieces of third-party content and applications - are available to some 400 million wireless subscribers.

Motricity is expanding beyond the U.S. market to reach Europe, Asia, India and Latin America. The company's 2009 revenue grew to $113 million, from $35 million in 2007.

While Motricity has yet to post an annual operating profit analysts remain bullish on the company's potential. The consensus analyst estimate is for Motricity to earn $0.13 per diluted share for the last three months of 2010, and to earn $0.38 for the full year. In 2011, analysts expect 110 percent earnings growth, to $0.80 per share.

Despite share price volatility, 5 of 7 analysts surveyed by Thomson Reuters remain steadfast in rating Motricity a buy. The consensus 12-month price target is $24. JPMorgan analyst Sterling Auty wrote in November that "...this is the best stock in our coverage to capture mobile data growth."

With a forward P/E of 25, the tech stock is a little rich so look to buy on dips under $20 if you're interested.

As a final note, the price of silver has dipped recently and opened the window of opportunity for two silver stocks that I cover in my Small Cap Investor PRO advisory. Learn about the Sierra Madre Silver opportunity here, and see if you want to take advantage of silver's dip to pick up some shares.