ZAGG Incorporated (NASDAQ:ZAGG)

Strong, good product, good marketplace

Patents on invisibleSHIELD and HzO will be a HUGE driver but consider the following technical analysis and upcoming catalysts:

Like in 2011, zagg tested its low and bounced strongly. On a technical level, this confirms the double bottom reversal is upon it. Based on this, Zagg is expected to shoot to $16, then explode to a higher high that is equal to the difference of the high/low, putting the price target at $26. Moreover, using fibonacci levels and elliot wave, Zagg has completed the c of the "abc" and has started a new "12345" movement, which also takes zagg between $26 and $28. On a value level, ZAGG has a low PEG, if it was value at 1 of expected 2011 earnings, Zagg would have a price of $19. Zagg is only trading at 10x 2012 earnings but actual rev and earnings are doubling every year. Insanely cheap. See a theme here? On top of this, there are over $8m shares short, so any positive news can double this stock with a massive short squeeze in 1 day, especially when this passes the previous high. This is the stock no-brainer bullish pick of a lifetime. All it needs a few catalysts. Just the rumor of going into walmart popped the stock over 13% on Jan 13th. Imagine if it was actually announced.

1)Walmart deal for invisible shields which can add $100M a year in revenue with high margin product. Additonal produts would equal more rev: Walmart deal for zagg keyboards, Zaggsparq and zaggcase, ifrogz ipad cases. Walmart kicking out competitors due to lawsuit liability.

2)US patents that zagg holds to keep knocking additional competitors out of the market. Aready had competitors settle with them. Competitors can set stuff up on Amazon, but can't get any shelf space in retail stores where people actually buy phones. Additional zagg patents in pipeline for skins and shield to cause shorts to cover quickly like the announcement of patent last summer.

3)Zaggs HDshield to become the go-to shield for all phones with no alternatives. Everyone will want to get the clearest shield possible. Existing customers upgrading to the HDshield!

4)Record earnings in 4th quarter, record earnings in 2011, leading to record guidance in March 2012. Expect a big run up. The IPAD 3 and IHPHONE 5, along with a record number of smartphones and tablets to be released in 2012 and 2013. Zagg is a high growth company disguised as a value company.

5)HZO deals announced with manufacturers. Each deal can pop the stock 10%. Imagine if 10 deals get announced in a short time span or on next earnings call. After all, getting over $1 in royalty for every phone made for the next decade. Billions of phones globally. Zagg owns 40% equity in the value of HZO as a company. Can you imagine if HZO makes the deal with Apple? I'm told their reps, along with every other manufacter were at the HZO booth at CES. Do a google news search on HZO and CES and reporters are saying the same.

6)Additonal analyst coverage with higher price targets over $20. Will any big firms initiate coverage in order to get inside deal on a HZO IPO?

7)Additional SKUs in exhisting channels. Expanding globally. Starting Zagg Asia and Zagg South America as discussed by CEO.

8)Zagg buy out. Logitech has not tried to compete with Zagg. They partner on the keyboard. Logitech needs growth. Logitech just filed an 8K to say they took out a $450M loan facility even though they are solid financially and hold little to no debt. Have over $300M in cash. They can issue stock. The last Logitech buyout was in 2009 when they paid over $400M for a company with $90M revenue. Look it up. Do the math.