Secure Your Position
|Written by GSCR Staff|
|Monday, 04 March 2013 10:13|
Hopefully everyone had a great weekend. It looks like the sky did not fall with all the D.C. sequester nonsense, so let’s move on to the markets.
Napco Securities Technologies, Inc. (NASDAQ – NSCC - $3.77) is an older established company in the home and business security market that is poised to make a run with some well-timed product innovations and positive business conditions.
The Company announced its 3 and 6 month results for the period ended on December 31, 2012 with generally good news, even though Super Storm Sandy wreaked major havoc on the Amityville, NY based company’s operations. Gross margins for the 6 month period increased from 26.8% to 27.1% for YOY period on a $1.4 million decrease in revenue for the same period. This is directly correlated to the Napco’s increase in sales of higher margin products. Additionally, cash generated by operations increased 155% YOY for the same 6 month period from July 1 to December 31 in 2012 versus 2011. The first 6 months of 2013 should be outstanding as the Company sells more new products and the effects of Sandy on the books are diminished.
Napco is poised for revenue growth as it has continued to create new products and generate ways for revenue on existing solutions. In the wake of Sandy Hook and other tragedies, the Company is looking to meet the current pent-up demand for safer schools and other public facilities with its LOCDOWN family of products. These are cost effective, mechanical locks, which enable a teacher to lockdown a classroom from the inside, and may provide safer alternatives. The company also launched iBridge™, a new, high margin, recurring revenue product, cloud-based services platform for remote operation of door locks, thermostats, lighting, video cameras and security systems from any smart phone, tablet or PC. These high margin products should definitely have a profound impact on the Napco’s bottom line and drive the stock higher.
The charts for NSCC are very bullish on all technical analysis methods including EMA and MACD. We think the stock can break through the $4.00 and go on a serious run to $5.50 to $6.00 in 2Q13.
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.
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