|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.
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.
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 Cap Research 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 TRIANGLE CONSULTING 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 TRIANGLE CONSULTING 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