The Yield Hoe's Notebook

Monday, October 15, 2007

"Car 54, where are you?," Time for some USA Mobility, Inc?

Below you'll find the offical story for USMO, a wireless company with an oddly high yield (21.90%, TGTBT?), a reasonable P/E (10ish), little to no debt to speak of, solid news headlines suggesting growth (via government contracts), and a wacky chart that shows it trading well below its moving averages and sinking, which make this 21% yield even more perverse to the eye. USMO provides pager, two way data (email) and cell services nationwide, and as Yahoo puts it:

USA Mobility, Inc. provides wireless communications solutions to the health care, government, enterprise, and emergency response sectors in the United States. It offers one-way and two-way wireless messaging services including information services through its digital networks. The company's one-way messaging consists of numeric messaging service, which enables subscribers to receive messages that are composed entirely of numbers, such as a phone numbers; and alphanumeric messaging service, which includes numbers and letters, and enables subscribers to receive text messages. Its two-way messaging services enable subscribers to send and receive messages to and from other wireless messaging devices, including pagers, personal digital assistants, and personal computers. USA Mobility also offers voice mail, personalized greeting, message storage and retrieval, and equipment loss and/or maintenance protection to both one-way and two-way messaging subscribers. In addition, the company offers mobile voice and data services through a third party provider, including BlackBerry devices and global positioning system applications. Further, USA Mobility offers machine to machine telemetry solutions for various applications that include asset tracking, utility meter reading, and other remote device monitoring applications. Its customers include businesses, professionals, management personnel, medical personnel, field sales personnel and service forces, members of the construction industry and construction trades, real estate brokers and developers, sales and service organizations, specialty trade organizations, manufacturing organizations, and government agencies. The company markets and distributes its services through direct and indirect sales force. USA Mobility is based in Alexandria, Virginia.

From reviewing the company's website (and somewhat awkward, somewhat robotic online store), it looks like they provide a better solutions for folks who need email on the road, two way paging, PDA phones than say major carriers hawking retail Smartphone products at higher prices, with a lesser network, if the company's site is accurate. At a 21 to 22 percent dividend yield, this stock could be just the ticket to amp up that compound interest in your portfolio with a low price to earnings multiple stock, if and only if its earning stand the test of time. Growth outlook is a little more sketchy about the company (we are still looking for a meaning ful PEG ration on the shares). Either way, maybe stop loss orders are the better part of valor in situations like this.

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