Its not so easy finding stocks that could double or more in the next 12 months, but have a look at OpenTV Corp (OPTV),  which provides advanced digital television solutions dedicated to creating and delivering interactive experiences to consumers of digital content worldwide. Its software enables cable, satellite, telecommunications, and digital terrestrial operators to offer enhanced television experiences to their viewers.

The company's software has been integrated in approximately 100 million digital devices around the world, and enables enhanced program guides, video-on-demand, personal video recording, enhanced television, interactive shopping, interactive and addressable advertising, and a range of consumer care and communication applications.

OpenTV also offers various advertising solutions, including campaign management solutions which allow network operators to manage the traffic and billing of advertisements, provide targeted and addressable advertising capabilities, and integrate measurement technologies that detail how viewers engage and interact with programs and advertisements. It sells its software solutions principally to network operators and manufacturers of digital set-top boxes and digital televisions, as well as related software solutions to broadcasters, programmers, and advertisers that enable them to offer interactive and enhanced television experiences.

Earnings growth in the past year has accelerated moderately compared to earnings growth in the past three years.

Analysts has significantly increased quarterly earnings estimates for OPTV:

• Ali Mogharabi – B. Riley & Co. has a BUY rating.
• Todd Mitchell – Kaufman Bros has a BUY rating & raised the price target from $2 to $3.

OPTV is trading at a forward P/E of 13x 2009 earnings and trading at 1.5x sales with a book value of $1.39. The company has no debt with $94M in cash.

Given the quarterly revenue growth of 34% and the analyst price targets of more than double the current share price, OPTV is simply undervalued.

Disclosure: none

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Jeremy Richards

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