Neonode, Inc. (OTC-BB: NEON), a leading provider of optical touch screen solutions for handheld and small to mid-sized devices produced by companies similar to Sony Corporation (NYSE: SNE) and Apple Inc. (Nasdaq: AAPL) needs no further catalyst for future growth as it stands to benefit from its aligned business strategies to continue to meet ongoing demand by consumers for touch screen technologies in modern consumer electronics.
Neonode Inc. (OTC-BB: NEON) is a provider of optical touchscreen solutions for handheld consumer electronic devices and industrial electric devices. With low cost and high-performance technology, the company has seen significant interest from big players in the industry, ranging from Sony Corporation (NYSE: SNE) to several large US and foreign based OEMs.
Well Positioned and Protected
Neonode is prepared for long-term growth through multi-year technology license agreements with several global consumer electronics companies with additional new contracts having been signed already in 2011 to complement a host of previous agreements. The latest design win, which is quantified by projected annual sales of at least one million units, with a major mobile phone manufacturer will integrate the Neonode zForce ® optical touch screen solution into Android based mobile phones. Although this does not carry any guarantee of mass production, it is a critical step in in the regimented process towards large-scale manufacturing contracts. This “design win” comes on the heels of a “contract win” with a global retail electronics company to incorporate Neonode’s touch screen solution into its family of products and carries with it the potential to be the largest technology license agreement that Neonode has signed to date. As customary, the names of these industry leaders have not yet been released for product secrecy reasons.
A key component in the highly-competitive world of technology is patent-protection of intellectual property. Neonode has secured the safety of another of their technology’s future through the issuance by the US Patent Office of a patent 7,880,732 for disambiguating a finger touch that covers more than one character on a virtual keyboard, using a light-based touch for small and medium sized screens. The patent, which is vital to the Company’s touch screen technology, is the fifth awarded to Neonode, with an additional 17 patents pending worldwide.
Longevity of Contracts Crucial to Business Success
Unfortunately, the majority of our society craves instant gratification in all avenues of life; however, the key to any success is virtually never based on that mentality. Sustainable long-term growth is the foundation in the maturation of any company or investment. Neonode’s business structure is based on royalties from contracts which has a snowball effect when exercised over time.
Revenues from earlier contracts are now being realized, and as time passes the revenue stream will compound based on royalties being received from contracts signed in the recent past and contracts still yet to come. Savvy investors utilize this knowledge of future growth when analyzing market capitalization data to find value opportunities in companies such as Neonode while the novice investor tends to only focus on the “here and now” only to miss the opportunity of bargain pricing.
The Technical Trader Takes Notice
While fundamental traders may find the latest news from Neonode worthy of further due diligence, technical traders will appreciate the uptrend that the NEON stock chart has been in for the last eleven months that has carried the share price from the penny level to touch 11 cents in mid-February. While impressive; it is pertinent to take a gander at the overall perspective of the chart by viewing a much longer version where the trend shift from bearish to bullish indications can be realized.
Technical traders are known to place emphasis on the 50 and 200 day moving averages. Watch any version of a CNN financial show and the position of any given equity as it relates to these key components of analysis will be discussed. In the case of NEON, the share price is moving firmly above both moving averages (considered bullish), which have now developed a strong upward channel. A key support level is established at 8 cents and, in the overall picture, the chart appears to be making a very large “rounded bottom,” also thought of to be a bullish formation.
As a result of revenues starting to be realized, a business structure that facilitates long-term growth, patented technologies and a technically sound stock chart, investors may continue to exert a bit more energy following along with the Neonode as it continues to move from developmental into a bona fide revenue producing company.