This column has mentioned eServ in the past. It has a mobile payment technology called HomeSend, which allows people to send money from their mobile phones.
eServGlobal is trying its level best to emphasise its third syllable. Currently trading on a market cap of $84 million, it aims to clip the ticket on literally billions of dollars of mobile phone transactions as the diaspora of Africa and India send their hard-earned foreign currency home, bypassing the traditional banking system.
Its stock's recent rise has been helped in no small way by UK stockbroker Hargreave Hale. Yesterday, eServ said that the broker's clients now own almost 6 per cent of its shares.
What excited them was its association with Vodafone and Xpress Money (a company that transfers money and offers access to the African market), announced late last month.
Possibly unlike the intrepid clients of Hargreave Hale, Radar isn't getting carried away. Using the words of Radar's Portfolio Manager: “These are substantive announcements but without substantive money.”
It's a race against time for eServ
Don't get this wrong, we're not complaining. It's one of Radar's tips and has now vaulted into our Top 10 for the past 12 months, where the average return for subscribers is 70 per cent. But you have to put these stocks in perspective. It's a high-risk play.
After selling its mobile phone billing business to Oracle for $107 million in 2010 it has a much smaller operating business, generating income from its technology to top up mobile phones. In the six months to 30 April on revenues of $12.6 million it made a loss of $11.3 million.
It's a race against time for this company, and investors are hoping that it can attract more telcos like Vodafone and Xpress to make its HomeSend product more attractive. These telcos are responsible for marketing its product.
We first tipped eServ last April and for much of that time our subscribers were under water. That is, until the Vodafone announcement. Now they're up just over 50 per cent, touch wood. eServ is another example of looking outside mining to make a speculative buck. And patience, in this case, has definitely been a virtue.
But it's not just the speculative stocks where people are making good money. Only two of Under the Radar Report's Top 10 tips are miners. Our best performer is in financial services. The next best is a gold miner, and then two biotechs, a mining services company, a junior telco, a manufacturer and another IT company.
Many of these companies don't have eServ's global ambitions, but they are profitable.
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