(this is the third post in a series.  read earlier posts about my purchases of NetSol Technologies (NTWK) and Art’s Way (ARTW))

#3: Secured Digital Applications (OTCBB:SDGL)

Description: Secured Digital is a provider of mobile communication, outsourced business and information technology consulting services.  Many of the company’s products and services focus on GPS, RFID, and bluetooth.  Secured Digital operates in the Pacific Rim, as well as the United States.

Market cap.: $5.57 million (midday 10/14/08)

Revenue outlook: Last quarter, Secured Digital posted $14.7 million in revenues, a 34% increase over the prior year.  CEO Patrick Lim stated: “Going forward, we will leverage on our existing core skill to produce mobile advertising content that will further contribute to the Company’s revenue growth.”

Earnings outlook: Secured Digital earned $438 thousand last quarter, up 33% over the prior year.   For the first two quarters, SDGL earned $1.14 million.  Earnings in this company are somewhat volatile.  The company does not offer guidance, and no analysts cover the stock.

Balance sheet: According to the latest 10-Q, SDGL doesn’t have a lot of cash or debt on its balance sheet.  However, SDGL has a huge trade receivable — roughly $11.05 million — consisting of amounts due from two concentrated customers.  Failure to collect would lead to a large writeoff.

DISCLOSURE: Long SDGL.OB.  I had a small position (underwater) as of Thursday, which I more than doubled by buying a chunk of shares at $.031 on Friday, 10/10/08.

Related posts:

1. Technical Communications (TCCO.OB) takes off, announces $2 special dividend
2. Penny stock Secured Digital Apps. (SDGL.PK) looks like it may ramp
3. Rentech (RTK) blows away estimates