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business newsLoJack Stock Is Riding High
By
Justin Sharon
Dec 13, 2010 5:05 pm
Shares in the company, best known for its tracking and recovery devices aimed at deterring vehicle theft, stand at a new 52-week peak, ending up more than 7% this afternoon to take the 12-month total return to over 50%.
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Some of the latest share movement has likely been propelled by day traders -- Recent Market Action Means Consolidation Is Coming has more -- and LoJack is undeniably a high beta name. However, more risk-tolerant investors may want to continue kicking the tires. Its Stolen Vehicle Recovery System operates in 28 states and more than 30 countries, and can be credited with the recovery of more than $5 billion in stolen assets globally. (Hollywood alone represents a rich revenue stream.)
LoJack’s products, which send out signals via silent radio transceivers to tracking units, are also employed to protect against the pillaging of construction equipment. With China’s voracious appetite for minerals sending Caterpillar (CAT) shares to the highest level in its 85-year history today and Joy Global (JOYG) up more than 2% to within a whisker of a fresh summit of its own, suffice to say potential avenues for further growth aren’t a closely guarded secret. Annual gross margins are forecast to be in the region of 50% for 2011, the company boasts an impressive balance sheet, and Italy offers especially good subscriber growth opportunities.
Downside risks include a sluggish car market here at home and near-term share price correction after recent strength.
Please see FBI Releases List of Most Dubious Statistics of 2009 and What the Eli Lilly Theft Means for Pharma.
Doom-mongers in the Middle East, never exactly lacking in ammunition, can point to a chronic water shortage as representing possibly the next looming regional crisis. For those of us who prefer to see the glass as half full, however, let’s all raise a toast to SodaStream International Ltd. (SODA). The Tel Aviv outfit, founded in 2007, has been on a hot streak since going public in early November. Shares surged 21% on its first day of trading after having been priced at an even $20.
The carbonated beverage appliance maker received a slew of analyst initiations this morning, among them Deutsche Bank’s Hold recommendation on account of a rich current valuation and a more bullish Outperform by brokerage William Blair. Oppenheimer is also an optimistic Outperform and assigned a 12-month price objective of $40. They say SodaStream is the preeminent player in a burgeoning home beverage carbonation market, with an attractive “razor-razorblade” model, and note that on a P/E growth basis the stock trades in line with other comparable consumer names.
As a child of the '80s who grew up in Britain, an earlier version of the company’s core product is enough to induce instant nostalgia in me. The firm continues to have broad name recognition in Europe -- in Sweden alone it’s in about one-fifth of households -- but is far less known on this side of the Atlantic. US sales are currently about 15% of overall revenues and the firm looks to grow name recognition exponentially in America.
Although the Israeli economy has held up far better than most in the Great Recession, geopolitical risk in a dangerous region always bears careful watching.
Also check out Israeli Stocks to Watch, Bad News for Israel ETF, and Israeli Shop Offers Free Sheep (As In Baaaaaaaaa) With TV Purchase
No need for Corning Inc. (GLW), which manufactures liquid-crystal displays (LCDs), to give away free sheep or indeed any other animals with flat-panel televisions today. But investors are certainly bullish following an upbeat Barron’s article (“Corning’s Winning App for the iPad”) over the weekend. Even after ending up more than 2% this afternoon, shares are in no danger of shattering the glass ceiling, having gained less than 5% over the past 12 months.
This upstate New York outfit dates to 1851 -- the same year Crystal Palace’s Great Exhibition showpieced the Industrial Revolution’s technological marvels in an iconic glass house -- and has "for more than a century….reinvented itself over and over again,” Barron’s quotes UBS analyst Nikos Theodosopoulos as saying. The company's CorningWear stovetop products were a staple of 1950′s kitchen conformity and its windows have ventured into the farthest reaches of our galaxy in the Hubble Space Telescope. Closer to home, investors currently have high hopes for its Gorilla Glass, which the financial publication calls a “potential winner” that “accommodates touch-screen functions” used in Apple (AAPL) items including, of course, the iPhone.
CFO Jim Flaws admitted the, well, flaws apparent from Corning’s “fiberoptics debacle” early in the millennium and the company now appears poised for brighter days. (Besides, with fiber optics darling JDU Uniphase (JDSU) surging itself today, maybe reports of the sector’s demise have been overdone anyway.)
One technological caveat for shareholders to consider: LED’s do face competitive threats from organic light-emitting diodes (OLED.)
Turn to Be Wary of Corning’s Downtrend and Bendable Fiber May Lead to Corning’s Breakout for more.
Spectrum Brands Holdings (SPB) finished some 1.53% higher today and stands near a new 52-week peak. The consumer products and appliance powerhouse produces items including alkaline, zinc carbon, and rechargeable batteries. It also manufactures various pet supplies, insect repellents, and assorted grooming products that are available in more than 1 million stores spanning more than 120 countries worldwide.
Founded in 1906, this Madison, Wisconsin firm both entered and emerged from bankruptcy in 2009 amid a heavy debt load. Category killer Procter & Gamble (PG), upgraded by Goldman Sachs analysts on Friday, is a fierce overall competitor, as is Energizer Holdings (ENR) in the specialized battery category.
Spectrum’s roster of well-known brands include Rayovac, Remington (familiar to any shavers of a certain age), and of course George Foreman’s Grill. It reported a fiscal fourth-quarter loss of $24.3 million, equivalent to $0.48 per share, last week partially due to acquisition charges. Revenue rose 34% to $789 million, a bit shy of analyst expectations as the company remains a work in progress.
Read related content at The Ten Best CEO Pitchmen and Hollywood CEOs: George Foreman.
No positions in stocks mentioned.
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