Broadband Over Power Lines

By Ian Wyatt, Big Idea Investor | FMCN | Jan 10, 2006 | comment

Big Idea Investor Investment Ideas Report Card 

It's pretty easy to pick stock winners when you're picking from the best ideas of three investment newsletters like Growth Report, Rising Star Stocks, and Supernova Stocks.  The editorial staff of each newsletter spends hours upon hours searching out the very best in investment ideas. 

That said, we still thought it would be fun to take a look at selected Big Idea Investor investment ideas to see how they have fared since being spotlighted in Big Idea Investor. 

Focus Media Holdings

Focus Media Holdings (Nasdaq: FMCN), an investment idea taken from the pages of Growth Report, has been our biggest winner to date.  We highlighted FMCN back in October.  Our reasons for highlighting the stock were admittedly simple: We are quite bullish on the Chinese economy, and particularly new media in China.  Since the company was originally featured within Big Idea Investor, the stock has surged nearly 80%!  What's behind the huge jump? Simply put, Focus Media, a leading provider of flat screen display advertising in office buildings and shopping centers, has been on the acquisition path of late, eliminating much of their competition in the process. 

After acquiring competing advertising network Framedia in early January shares of Focus hit a then 52-week high of $38.50.  And then this Monday, Focus upped the ante, merging with its biggest rival, Target Media Holdings Ltd, which is backed by the well known Carlyle Group.  The move by Focus means that the company is likely to maintain its market dominance for many, many years to come.  After the acquisition, shares of Focus hit a new 52-week high of $42.  And on Tuesday the stock continued higher, reaching at $45. 

Grade: A+ 

Would you like to learn more about Focus Media's prospects for 2006? Take a free 30 day trial to Growth Report today and read the full report on Focus Media today.  Also, as a special signup bonus, get Growth Report's "China Investment Report: Inside the Booming Chinese Internet Sector," a 52-page research report that highlights 7 more Chinese stocks worth keeping an eye on.  Click here now - it's free!


Coldwater Creek 

We brought you Coldwater Creek (Nasdaq: CWTR) from the pages of Supernova Stocks in September.  While women's love of shopping is not exactly a revelation, we, like most growth-oriented investors, are certainly always on the lookout for the next big retail stocks since some of the very best performing stocks of the past decade include retailers such as Urban Outfitters (Nasdaq: URBN), Chico's (NYSE: CHS), American Eagle Outfitters (Nasdaq: AEOS), and Jos A. Bank (Nasdaq: JOSB).   

As Coldwater successfully continues their transition from catalog retailer to a retailer of the bricks and mortar variety, their share price has risen accordingly.  Since being featured in Big Idea, shares of Coldwater have risen about 35%.  Not bad for just a few months work!

Grade: A

Get the whole story on Coldwater Creek when you take a free 30 day subscription to Supernova Stocks today.  Supernova Stocks profiled 42 companies in 2005.  Of those, 73.8% have shown gains.  Signup today and be the first to receive the brand new issue of Supernova Stocks with two fresh stock ideas.  Plus receive the special report "Fifty & Up: How to Profit from America's Aging Population" as your signup bonus.  Click here now! 

Summus 

Summus (OTC BB: SMMU) came our way courtesy of Rising Star Stocks. Since being featured in this free weekly newsletter, the stock has taken a bit of a tumble, down about 28%.  Why then did we decide to highlight this stock again? Because we still believe in the big idea behind the company.  Mobile content is a sector that we are particularly fond of.  While it has caught on in Europe and Japan in a big way, the U.S. still lags in its appetite for mobile gaming and applications. That's not to say that interest isn't picking up, because it certainly is. 

Summus, in our opinion, is well positioned to take advantage of the mobile content trend currently gaining steam in the U.S. by providing a wide array of licensed content, including games and applications from such well-known partners as Sports Illustrated, America Online, Fuijifilm, Mattel, The Associated Press, The Wall Street Journal, Golf Digest, and the Grateful Dead among others. 

Grade: Incomplete 

At its current price levels does Summus represent a buying opportunity? Find out more about the company when you take a free 30 day trial subscription to Rising Star Stocks today. Despite Summus' disappointing performance and a poor year for most indices, Rising Star Stocks still came through 2005 with a +18.8 gain. Sign up for your FREE 30 day trial subscription to Rising Star today!



Broadband Over Power Lines

By Vijay Balkissoon, Staff Writer, Big Idea Investor  

Chances are that if you live in rural America, you have very limited options, if any at all, when it comes to high-speed Internet access.  And if you are in an urban or suburban area that is served by DSL and cable Internet access providers, perhaps you feel that you are paying too much for high-speed. Now thanks to broadband over power line, regardless of where you live, you may soon have yet another option on the table. 

Broadband over power line (BPL) is a technology that has been promised ever since the high-speed revolution took hold.  Having the ability to literally "plug and play" by tapping the power lines and outlets in your own home for Internet access at roughly the speed of a DSL connection (500 kilobits per second or faster) has broad appeal.   

While cable and DSL have dominated in the broadband arena, BPL has yet to really take off and has not received nearly the same amount of attention as the more widespread technologies.  Even as I write this column, News Corp.'s (NYSE: NEWS) DirectTV Group announced that the company is prepared to spend up to $1 billion to develop a satellite broadband alternative.  Which leads me to the question, why hasn't there been more investment in BPL, a technology that makes use of the power lines that run over your head and beneath your feet - already existing infrastructure? 

BPL technology has been held up by a variety of technical, financial, and regulatory challenges in the past.  With some of these hurdles now out of the way, one company has emerged as the clear leader in the BPL derby: Current Communications Group, a private firm based in Germantown, Maryland.  Current is notable not only for its initiatives in BPL, but also for the high-profile investors that have taken stakes in the company including Liberty Media (NYSE: L), Goldman Sachs (NYSE: GS), and Google (Nasdaq: GOOG). 

In 2004, Current began its rollout of a BPL network over Cincinnati's power lines in a partnership with Cinergy (NYSE: CIN).  The service is now available to more than 50,000 homes in the Cincinnati area and the companies say they are on target to make BPL available to 250,000 homes by 2007.  Cinergy and Current have been protective of the results of this first large-scale experiment for competitive reasons, but Sanford Bernstein & Co. analyst Tom Wolzien, who has been following the Cincinnati rollout closely, estimates that Cinergy and Current have signed up about 15% of homes passed, which would translate to more than 8,000 customers.  Broadband from Current and Cinergy runs Cincinnati area customers $29.95 per month, which is about $15 cheaper than DSL from Cincinnati Bell or high-speed from Time Warner Cable (NYSE: TWX).   

With the early results of the Cincinnati rollout looking promising, this December Current and TXU Electric Delivery, the largest electric company in Texas, announced that they will construct a high-speed Internet network over the power grid in North Texas, including the Dallas-Ft. Worth area.  Once construction of the network is completed sometime in 2006, about two million homes and businesses would be able to subscribe to BPL broadband. 

Current's deal with TXU Electric also calls for the utility to sign a 10-year $150 million contract for use of Current's "Smart Grid" technology. Current's "Smart Grid" electric utility services will allow TXU Electric to monitor its electric distribution network remotely and in real time, automate outage and restoration detection as well as outage prevention, and automate meter reading of BPL-enabled electricity meters. 

The Current/TXU Electric deployment in Texas will be the largest BPL network to date.  If the deployment proves successful it is likely that we could see the rollout of other such networks in the years to come since BPL promises to bring a number of benefits to all parties involved.   

First, with more options for high-speed Internet access in the marketplace, consumers could enjoy lower costs for home high-speed.  Second, BPL could bring high-speed to communities that have not been served by cable or telecoms.  For cable companies and telecoms, building the infrastructure in these areas has not been a high priority, as a simple cost-benefit analysis would counter indicate doing so. BPL can step in and fill this void as a legitimate "Last Mile" option for those communities, either in concert with, or as an alternative to other Last Mile technologies such as Rising Star Stocks portfolio holding Alvarion's (Nasdaq: ALVR) WiMax solution. 

For the utility companies, BPL promises to be a welcome stream of revenue.  Plus, as we noted earlier with the Current/TXU relationship, a broadband enabled power grid can help a power company operate more efficiently.  And, as with other high-speed Internet technologies, BPL has the potential to deliver far more than the World Wide Web to homes.  BPL could soon be equipped to carry voice and video data.  All in all, it makes for a pretty exciting future for what used to be boring old power lines.

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