Why Neonode Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Neonode (NASDAQ: NEON  ) rose more than 14% Thursday after the optical touch technology specialist issued a press release stating it has "entered a new worldwide license agreement with a second undisclosed Tier-One Consumer Electronics OEM in South Korea." Through the agreement, Neonode's patented MultiSensing technology will be integrated into high-volume consumer applications. 

So what: Today's news comes less than two months after Neonode's similar announcement in July, which stated the company had landed its first design win with a different Tier-One consumer electronics OEM in South Korea. Though neither release specifically names these mystery partners, it would seem they're likely Samsung and LG, which collectively represent the two most significant South Korean players in the global consumer electronics market.

Now what: Neonode CEO Thomas Eriksson certainly fueled this speculation by stating, "This landmark agreement is a major milestone for Neonode, as it is a testament to our ability to deliver outstanding value for the largest global OEMs. We are extremely excited to bring our feature-rich technology to a celebrated global brand of this size and stature."

While Neonode currently isn't profitable on a trailing price-to-earnings basis, there are plenty of applications for its technology from tablets to home appliances and wearable technology. Today's news, then, makes it seem all but certain the company will ultimately achieve sustained profitability, so with the stock trading at less than 22 times next year's estimated earnings, it could prove a bargain down the road.

No Pitch


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2624318, ~/Articles/ArticleHandler.aspx, 10/1/2014 6:44:12 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement