When Motorola Solutions
The new Iridium Communications
Armed with smaller, cheaper, and more convenient handsets and a growing subscriber base of 447,000 customers, Iridium is serious business. In the just-reported first quarter of 2011, Iridium grew sales 12% year over year while turning the year-ago loss into $8.3 million of net profit.
Over the last year, Iridium's subscriber base has grown by 25% at relatively stable customer pricing. That growth charge is led by government subscribers and the smaller but explosive market for machine-to-machine (or M2M, as Iridium likes to call it) data communications.
Operating costs are coming down as a new generation of handsets and transceivers commands nearly the same end-user prices as the previous batch but is much cheaper for Iridium to produce.
That puts Iridium in a better position to launch its next-generation network, dubbed Iridium NEXT. Most of the 66 active satellites in Iridium's global network today were launched by the old Iridium and are getting long in the tooth. The company now describes the NEXT program as "fully funded" by a variety of loans, warrants, and cash flows.
Most satellite communications services focus on a specific region; DIRECTV
Generalists Inmarsat and Globalstar
Investing in Iridium today means getting a jump on the market. Shares are down 25% from yearly highs, the stock is followed by a measly four analyst firms, and trading volume tends to be very low. It's a classic Motley Fool Hidden Gems stock -- small, underfollowed, and poised for years and years of rapid growth.
You can grab a free 30-day trial pass to Hidden Gems right here with no strings attached, or just add Iridium to My Watchlist to follow the stock at a slightly greater distance. Either way, I think you should watch this stock.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Fool owns shares of Iridium Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.