MEDL Mobile Holdings, Inc. (OTC:MEDL) Recovers from Slump

Although the mobile phone app market seems crowded, this business model still seems to work for MEDL Mobile Holdings, Inc. (OTC:MEDL), and the ticker went up on significant volumes in the past two months. A recent spike in the price, up more than 12% to 39 cents, follows a small valley in MEDL‘s chart. The stock has been on a slow upward trend since the middle of February, when MEDL sent out a press release that it would update an app to distribute access to Encyclopedia Britannica.

To make a breakthrough on the apps market, MEDL has to deal with the following financial strengths and weaknesses:

• $944,034 cash

• $824,294 current liabilities

• $1.11 million revenues

• $700,040 net loss

While MEDL was right in its prediction that new apps would boost its stock, the company is still under significant losses. The updated encyclopedia app already sells on the Apple Store, and used the President’s Day in the USA to boost sales with a price of 99 cents. “Britannica Kids: U.S. Presidents” offers in-depth biographies of 44 US presidents, and its current price is $1.99.

In addition, MEDL was selected by Hyundai to develop specialized automotive apps. Otherwise, the ticker hardly relies on paid pumpers for its reputation, and in fact the September 2012 promotion seemed to have a reverse effect, leading to a sharp drop at the end of the year. Since then, a combination of valley buying and MEDL‘s credibility lifted the ticker back up.

In September, MEDL was mentioned in a single email by RedChip Companies, Inc. Red Chip provides investor relation services for MEDL in exchange for a monthly fee plus stock compensation and app-development services. The email and analysis from September 12th did little to improve volumes and the stock drifted down without significant change.

RedChip has a longer history of past promotions, with a current offer for GlyEco, Inc. (OTC:GLYE). The ticker shows a marked turn in its trend since the email on March 7th and we are yet to see where this promotion goes. MEDL shows less volatility than usual for small cap companies, and is priced at a reasonable $17 million with 43 million shares outstanding. In any case, do your own estimation of preferred risk before taking up this position.