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Our New Surprise Pick:  Dataram Corporation  (OTCQB:  DRAM)

The market has continued to be tricky waters for investors right now. Emerging markets and commodities are driving hope into a hole in the ground. But, as long as you have a high bar for quality assessment in doing your scanning and research, you can find some of the most productive plays of all precisely during times such as these.
 
Today’s pick is an almost unbelievable overall combination of old school industry and new emerging growth trend – tiny float, sudden huge sales growth, coming off a panic oversold level with the potential to pop right off the chart and into orbit if it gets loose.

DRAM describes itself as a “leading independent manufacturer of memory products and provider of performance solutions that increase the performance and extend the useful life of servers, workstation, desktops and laptops sold by leading manufacturers such as Dell, Cisco, Fujitsu, HP, IBM, Lenovo and Oracle. Dataram's memory products and solutions are sold worldwide to OEMs, distributors, value-added resellers and end users. Additionally, Dataram manufactures and markets a line of Intel Approved memory products for sale to manufacturers and assemblers of embedded and original equipment.”

Is the memory market dead? Far from it. In a recent report out of Technavio, their analysts forecast the global D-RAM market to grow at a CAGR of 13.20% over the period 2014-2019 off a base of about $34B in overall size.

So, this a very established market. But DRAM is a core leader in the space already. In fact, a full 70 of the world’s Fortune 100 companies are powered by Dataram.

This combination of strong context and leadership industry position has DRAM financials starting to shape up in extraordinary fashion. For example, DRAM just came out with fiscal Q1 numbers which were excellent, highlighted by a massive 30% sequential q/q topline sales growth dynamic that may have huge consequences for the stock’s outlook going forward.  (See Full Press Release Here).

The result is a dramatically improving chart. DRAM dropped to hit $1.10 on 08/26 with an RSI sub-20!

This is an extremely rare level of oversold readings and suggests the stock was trading at that point at an extraordinary discount. Since then, DRAM has ripped over 50% higher before settling into a nice, constructive lateral consolidation.

Now, we’re seeing it break back above the 20-day exponential moving average, which is a nice benchmark for gauging a coming breakout.

With a tiny float of just 2.99M shares, that breakout could be something monstrous.

About DRAM

DRAM (Dataram Corporation) develops, manufactures, and markets memory products primarily used in enterprise servers and workstations worldwide.

DRAM provides customized memory solutions for original equipment manufacturers (OEM); and compatible memory for various brands, as well as a line of memory products for Intel and AMD motherboard based servers.

DRAM also offers various memory solutions services, including performance optimization; engineering and design services for embedded applications; proof of concept engagements; customized consignment programs; product on-demand offerings; installation services; software products that improve application and computing performance; and buy-back programs.

DRAM also operates Memorystore.com and 18004Memory.com that provide a one-stop Web source for memory products used in desktops, laptops, notebooks, servers, workstations, MAC systems, printers, digital cameras, PDAs, MP3 players, and others.

DRAM was founded in 1967 and is headquartered in Princeton, New Jersey.

Top Investor Highlights

• DRAM has a small trading float of just 2.99M, which suggests the stock could launch higher on any additional influx of interest.

• DRAM is making real money, with trailing 12-month revs already coming in at $27.87M, and q/q sales growth of 30%.

• DRAM is coming off an RSI trough under 20, pointing to a massively oversold stock now heading back the other way.

• DRAM just recorded a MACD Bullish reversal, suggesting a technical change in trend.

DRAM Players Stay Profitable With Overall Revenue to Rise 16% YoY in 2015 – Courtesy, DRAMeXchange

2014 has been a fruitful year for the DRAM industry. Tier-one manufacturers, benefiting from the global smartphone boom, have all stepped up mobile memory production. According to DRAMeXchange, a research division of TrendForce, mobile memory will account for 36 percent of overall DRAM production this year and is very likely to surpass 40 percent of production in 2015.

“Because of high demand for mobile memory, DRAM manufacturers have somewhat reduced standard memory production, keeping module prices high,” said Ken Kuo, Assistant Vice President at DRAMeXchange. This year, the 4GB module has been selling for about US$32 while the average margin for standard memory has been above 40 percent, Kuo said, adding:

“All DRAM manufacturers are staying profitable. The increasingly oligopolistic nature of the market and changes in market demand will stable the development of the industry in 2015.”

In Summary

DRAM is set to continue to benefit from an improving market backdrop after logging major panic technical lows on the chart. With a tiny float of just 2.99M shares, this stock has a ton of blue sky above.

Company Website:  http://www.dataram.com

Quote:  http://finance.yahoo.com/q?s=DRAM

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