Pull Money Out of Thin Air

Written by GSCR Staff   
Thursday, 05 March 2015 06:30

We conclude this week’s ‘March of the Millennials’ theme with another Gen Y stock.

We have featured USA Technologies, Inc. (NASDAQ – USAT - $2.31) in the Market Monitor and Goldman Guide over the last few years and we believe that we have reached yet another favorable entry point. For the uninitiated, USA Technologies is a leader of wireless, cashless payment and M2M telemetry solutions for small-ticket, self-serve retailing industries.

 

As we mentioned earlier this week, Millennials love their Apple products (NASDAQ – AAPL) more than life itself. One of the hot new products/services offered by the Company is Apple Pay, allowing consumers to process transactions with mobile apps, and literally pull money ‘out of thin air’.

 

The chart below illustrates the stock’s one year performance along with the 200-day EMA for. It is easily seen that the long term technical indicator definitely is favorable for the stock.

 

USAT 1-Year Chart – 200 Day EMA

(Source: www.otcmarkets.com)

 

MM.02.05.15.1yr-USAT

 

 

More importantly, the Company knows where its bread and butter and several weeks ago it announced that about 200,000 of its points of purchase will now accept Apple Pay.   The Company is outfitting laundromats, parking kiosks and "other self-serve appliances" with the payment terminals. This could create huge tailwinds for USA Technologies for future revenue streams.

 

There are a few other metrics not to overlook here when it comes to USAT. A low EV/EBITDA of 15 is the first. Plus, USA Technologies has been granted 87 patents and is well-positioned in its space, as evidenced by its recently released 2014 results and 2015 top-line guidance. For full year fiscal 2015, management continues to expect total revenue in the range of $51.0 million to $53.0 million, for a growth rate of 20% to 26%.

 

In our view, USAT is a solid technology play that should maintain its momentum this year. Investors should target the $3 level by 4Q15.

 

Have a great day!

 

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

Disclaimer:

This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports. 

Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.

It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations. 

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small CapResearch blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.

ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLECONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS   INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLECONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com

 

Add comment
  • No comments found