Oldie but a Goodie

New companies can be very exciting. Typically, they offer new technologies, fresh ideas, and the best part is that because they are new they make people feel as if they are getting in on the ground floor of something that could be a huge winner. Some investors seek out these fresh stocks as a way of trying to get ahead of the curve and potentially ahead of the herd, in an effort to record outsized gains.

These notions are all well and good. But, the fact remains that the newer the company, the more unproven and immature it really is, and these characteristics could leave investors vulnerable to negative returns and unwanted volatility.

On the contrary, there are exciting companies that have a deep history that could provide similar returns as a new company, but perhaps offer less volatility. One such firm is e.Digital Corporation (OTCBB – EDIG - $0.08). E.Digital has a long history and track record of technology innovations that have enabled it to garner license and royalty revenue since its founding 24 years ago.

Through its Innovations Group, e.Digital’s charter is to further the company’s history of innovation, develop a strong and diverse intellectual property portfolio and to collaborate with strategic partners to bring game-changing technologies and products to market. Throughout e.Digital’s 24-year history, it has created foundational technologies that are at the core of wireless headset, digital audio/video recorder and portable music-player markets – which, from time to time, receive royalties.

The company licenses and enforces its Flash-R portfolio of flash memory patents for use in portable devices produced by electronic product manufacturers. Interestingly, EDIG helped pioneer the flash memory industry in the 1990s. Additionally, it engages in developing new intellectual property for possible licensing in the areas of communication networks and digital data distribution.

Other technologies include the development and marketing of eVU mobile entertainment system to the travel industry in the United States and internationally. Its eVU is a portable audio/video player designed to securely play encrypted content primarily for the airline and other travel markets.

The company’s most recent innovation could prove to be extraordinarily popular.

Nunchi is a technology which retrieves data from an array of existing mobile phone sensors and uses this information to recognize, understand and affect interactions among people. Nunchi-based services utilize cloud-based servers, existing communication networks, sensor fusion, adaptive algorithms and relational databases to understand and anticipate the needs of people.

The actual effects of Nunchi range from simplistic tasks such as communication screening (based on the user’s availability and the nature of the call) to much more complex tasks such as optimizing a user’s interactions and activities to enrich their lives. In effect, the cloud-based application can serve as one’s personal assistant.

EDIG’s shares trade over 250,000 daily and have a deep publicly-traded history, due to the success of its previous innovations. Clearly, Nunchi could be the next success story for the company. While it is still in the early stage of development, management envisions that this app could be marketed and sold to and through mobile operators as an additional revenue source.

EDIG’s near-term success will likely be driven by its legacy products while its new technology should be considered as a potential bonus for investors. Thus, EDIG should be attractive to investors seeking a mature, low-priced stock with big-time potential for growth through new offerings.

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