Protect the ‘Green’
|Written by GSCR Staff|
|Thursday, 12 February 2015 06:59|
We finish our theme for the week on America’s love of money.
How ironic that the Powerball hit $500 million last night…certainly any winner(s) would experience a life changing experience. The question is would this be another rags to riches back to rags story that so many lottery winners experience? We digress…
A stock that is related to protection of assets and ultimately, ‘the green’ appears to be coming out of the cellar on a serious accumulation run. LoJack Corporation (NASDAQ – LOJN - $2.43) has climbed 14% since the start of February, coming off a 52-week low. Additionally, the stock is trading right at the 50-day EMA, an important technical indicator, as illustrated below.
6-month Chart for LOJN
LoJack provides technology products and services for the tracking and recovery of mobile assets, stolen vehicles, motorcycles, construction equipment, motorcycles, cargo, and people at risk of wandering. It offers LoJack Unit, a LoJack Stolen Vehicle Recovery System component that consists of a high frequency transponder with a hidden antenna, microprocessor, and power supply, as well as a set of secret codes unique to the unit; LoJack Early Warning Unit, an optional component that provides early notification to vehicle owners in the event of unauthorized user; LoJack for Construction Equipment that is designed specifically for installation on heavy equipment; and LoJack for Motorcycles, which is designed specifically for installation in on roadmotorcycles. The Company also licenses LoJack for Laptops, a system to recover the stolen computers; and LoJack InTransit, a cargo tracking and recovery solution. In addition, it provides SafetyNet system, which comprises a transmitter, and a search and rescue receiver used by public safety agencies.
One big plus is that LoJack has over $20 million of cash on hand with only $10.5 million in debt as of the end of 3Q 2014. Additionally, consensus estimates project a 7% CAGR in top line revenue for 2014 and 2015 over 2013. Finally, LoJack has an impressive gross margin of 48% versus the industry average of 40%, a strong indication of optimal market prices for products and services.
LoJack will report Q4 2014 financial results today. Look for a pop if the news is good. The stock could benefit greatly as the economy hopefully gets back on track and both consumer and commercial sectors grow for the firm. We think LOJN reaches $4 by the end of Q2 this year.
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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