Why Digital Turbine (APPS) Stock is a Compelling Investment Case

Greenhaven Road Capital recently released its Q3 2020 Investor Letter, a copy of which you can download here. Greenhaven’s estimated returns for the third quarter totaled approximately +50% net of fees and expenses. August was the best month in the partnership history. The net result is that both funds are up around 55% for the year, comparing favorably to the Russell 2000, which ended September down -8.7% year to date. You should check out Greenhaven Road Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Greenhaven Road Capital highlighted a few stocks and Digital Turbine Inc. (NASDAQ:APPS) is one of them. Digital Turbine Inc. (NASDAQ:APPS) is a software company. Year-to-date, Digital Turbine Inc. (NASDAQ:APPS) stock gained 380.7% and on November 3rd it had a closing price of $34.27. Here is what Greenhaven Road Capital said:

“Digital Turbine (APPS) – In round numbers, the share price for Digital Turbine almost tripled during the quarter. What happened? The company enjoys a unique place in the mobile phone ecosystem as it is the only company embedded into the Android operating system to allow for app downloading. Digital Turbine sits between major carriers, such as Verizon and AT&T, and companies, such as Netflix and Amazon, that want their apps pre-installed on Android phones. With 6,000 apps being added per day to the Android platform, demand for the limited number of app slots has only increased. Fortunately for Digital Turbine, both the number of devices and revenue per device continue to improve, which helped drive up the share price. However, I think the larger driver was that earlier this year, the company acquired Mobile Posse, which provides “media & advertising solutions for operator & OEM partners while delivering richer, more relevant content to end users.” This is a content business that generates substantial recurring revenue over the life of the phone and is not as tied to activations/new phone sales as the historical app install business is. Mobile Posse’s recurring revenue nature is attractive, as is the potential to sell Mobile Posse products into the existing Digital Turbine base and vice versa. I believe that this remains a very well-positioned company with the possibility that cross-selling will yield step function increases in growth if successful.”

5, android, app, application, background, cellular, communication, concepts, corporation, device, edge, editorial, electronic, galaxy, global, group, ideas, illustrative,

Zeynep Demir / Shutterstock.com

In August, we published an article revealing Greenhaven Road Capital bullish investment thesis on Digital Turbine Inc. (NASDAQ:APPS) stock in its Q2 2019 investor letter. This suggests that the investment firm has been bullish for a long time on Digital Turbine Inc. (NASDAQ:APPS).

In Q2 2020, the number of bullish hedge fund positions on Digital Turbine Inc. (NASDAQ:APPS) stock decreased by about 18% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in Digital Turbine’s growth potential. Our calculations showed that Digital Turbine Inc. (NASDAQ:APPS) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.