BTW, if you get some time to review my post on CAMP that would be great. It looked like a promising company.
Hi Anirban,
This is the first thing I came across on the Yahoo Finance board. It’s very short term thinking though, so I wouldn’t get too upset about it.
Saul
CalAmp Corp. (CAMP) could be a stock to avoid from a technical perspective, as the firm is seeing unfavorable trends on the moving average crossover front. Recently, the 50 Day Moving Average for CAMP broke out below the 200 Day Simple Moving Average, suggesting short-term bearishness.
This has already started to take place, as the stock has moved lower by 32.1% in the past four weeks. And with the recent moving average crossover, investors have to think that more unfavorable trading is ahead for CAMP stock.
If that wasn’t enough, CalAmp isn’t looking too great from an earnings estimate revision perspective either. It appears as though many analysts have been reducing their earnings expectations for the stock lately, which is usually not a good sign of things to come.
Consider that in the last 30 days, 1estimate has been reduced, while none have moved higher. Add this in to a similar move lower in the consensus estimate, and there is plenty of reason to be bearish here.
That is why we currently have a Zacks Rank #5 (Strong Sell) on this stock and are looking for it to underperform in the weeks ahead. So either avoid this stock or consider jumping ship until the estimates and technical factors turn around for CAMP.
Anirban,
This is from the recent quarterly report which caused the big sell-off.
Business Outlook
Commenting on the Company’s business outlook, Mr. Burdiek said, "In the fiscal 2015 first quarter, we expect consolidated revenue in the range of $56 to $60 million (That’s down or flat with $60 million this quarter).
We anticipate Wireless Datacom revenue in the first quarter will be higher on a year-over-year basis but be relatively flat on a sequential quarter basis due primarily to an expected decline of approximately $3 million of revenue from our key OEM customer in the solar power industry.
Satellite revenue in the first quarter is expected to be down slightly on a sequential quarter basis. (I would have expected this quarter to be lots better than last quarter’s winter impacted results)
At the bottom line, we expect first quarter GAAP-basis net income in the range of $0.05 to $0.09 per diluted share and non-GAAP net income in the range of $0.17 to $0.21 per diluted share.
We enter fiscal 2015 with continued strong customer demand across most of our key market verticals and significant growth opportunities that are expected to gain momentum as the year progresses. As a result, similar to fiscal 2014, we anticipate that the second half of fiscal 2015 will be stronger than the first half, with contributions from our emerging insurance and heavy equipment customers. We expect Satellite to return to a normalized revenue run rate of approximately $10 million per quarter as experienced prior to fiscal 2014, and our Wireless Datacom business growing at or above market rates for the full year, resulting in overall fiscal 2015 growth in non-GAAP earnings per share of approximately 30%."
There’s nothing there that makes me want to sell some of one of my existing positions to buy this. It’s not bad, but they seem to be having problems.
Saul
Anirban, Reading their conference call, they seem a lot more enthusiastic about the future. On the other hand, they have so many odd and different businesses (car theft prevention, solar energy companies, insurance, etc) that it’s hard for me to get a grasp of their business, although a visit to their company website reveals that they seem to be concentrating on machine to machine communications and thus to be a competitor of SWIR (a MF RB recommendation). I haven’t fully investigated them as I would if I was investing in them, but their adjusted PE seems more than reasonable at current prices if they can get their business going after what they expect to be a slow June quarter.
Saul
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Anirban, Reading their conference call, they seem a lot more enthusiastic about the future. On the other hand, they have so many odd and different businesses (car theft prevention, solar energy companies, insurance, etc) that it’s hard for me to get a grasp of their business, although a visit to their company website reveals that they seem to be concentrating on machine to machine communications and thus to be a competitor of SWIR (a MF RB recommendation). I haven’t fully investigated them as I would if I was investing in them, but their adjusted PE seems more than reasonable at current prices if they can get their business going after what they expect to be a slow June quarter.
Thanks Saul.
If I remember correctly, in their call they seem to be projecting for strong growth in the third and forth quarter. M2M communications is a rapidly growing area with applications in many different area: fleet logistics, utility management (e.g., readings from smart meters), insurance (e.g., driving-based insurance - think Progressive), point of payment etc. I think this company is focussed on some of these “verticals”. As they say, they are into “Internet of some things”.
I have this position as a complement to my SWIR position.
Currently, CAMP has an adjusted PE around 22. It grew revenues around 30% YoY. Seemed reasonably priced, as you said above.
Anirban