Planet Payment Looking to Break Higher
The behemoth technology stocks dominate the news because they are the darlings of Wall Street—companies that show staggering and consistent growth. Yet, on the other end of the spectrum are much smaller technology plays, which don’t have the same prestige, but offer investors above-average risk-to-reward opportunities. Take the case of Planet Payment Inc (NASDAQ:PLPM), with a market value of $191.0 million.
The market cap is so small that many of the larger technology companies easily spend more than 10 times Planet Payment’s market value each year for research and development.
At first glance, the ability of PLPM stock to eventually become the next Apple Inc. (NASDAQ:AAPL) or Facebook Inc (NASDAQ:FB) is probably remote, but it doesn’t mean you should kick stocks like this to the curb.
The reality is that small companies like Planet Payment tend to offer risk-averse traders a much higher risk-to-reward trading opportunity than the Apples or Facebooks of the world.
For instance, Planet Payment stock can easily double within a year if it delivers great results and news. A doubling is highly improbable for Apple within a year.
Bulls Could Drive PLPM Stock Much Higher
The weekly chart of PLPM stock is bullish and displays the emergence of a bullish golden cross—a situation when the 50-day moving average breaks above the 200-day moving average. Generally, a stock will continue to trend higher as long as it can hold its 50-day moving average, which has been the situation with Planet Payment stock.
Chart courtesy of StockCharts.com
Investing and trading is all about the opportunity, regardless of the size of the company. Investors should have investment capital spread across all market-caps.
Planet Payment is intriguing. The company has developed a transaction platform that allows buyers and sellers to deal regardless of where they are located in the world. For instance, someone in a remote area of India could buy a product from someone in the Amazon forest.
The company’s platform is broad, and is found in 23 countries in Asia, the Americas, Europe, Africa, and the Middle East.
Planet Payment’s clients comprise of banks, card providers, processors, merchants, and consumers. The base comprises of around 71 financial services companies and 103,000 active merchant locations. (Source: “Our Company,” Planet Payment Inc, last accessed May 12, 2017.)
PLPM stock has underperformed the Russell 2000 and S&P 500 with a decline of four percent year-to-date and six percent for the year.
Yet a company like Planet Payment can easily reverse course and return explosive price appreciation to traders.
Fundamentally, Planet Payment has grown revenues in four consecutive years, and the growth is slated to continue at 10% this year and 11.6% to $66.7 million in 2018. (Source: “Planet Payment, Inc. (PLPM),” Yahoo! Finance, last accessed May 12, 2017.)
As far as the bottom line is concerned, Planet Payment is profitable, which is impressive for a company of its size.
PLPM stock trades at an attractive 16.67-times its 2018 earnings per share (EPS) and a cheap price/earnings to growth (PEG) ratio of 1.09. This means that, even if Planet Payment stock doubled in price to the $7.60 level, the valuation wouldn’t be stretched.