ID Systems Inc. (Nasdaq: IDSY), a $146 million provider of wireless systems for tracking business assets, at $13.13, is more than 50% off its highs and a strong earnings report last night could signal the end to their painful 2-year-long slide. I’m not buying until I see enough trading volume/ buying interest, but IDSY makes the cut to be included in the inaugural TIM watchlist.
Quarterly revenues were down 20%, but t
hat’s nothing new (the company’s been restructuring their biz for several quarters), margins were up to 49.8% from 44.3% last year and most importantly, they beat earnings estimates by a dime, surprisingly breaking even.
What I like most is their blue chip client list: USPS, Alcoa, Walgreens and many more and their $60 million in cash (nice safety net). Their clients need their RFID tracking devices to better manage their inventory and make their businesses more efficient. The technology is important so even if the short-term price action doesn’t make it worthy of TIM, I think this will be a long-term winner.
There’s solid support at $12 and the 1+ million shorts in this stock could say “You know, this company has $60 million in cash and a who’s who list of clients, why risk it—let’s take some profits and buy to cover.” And that’s how bottoms are created.
Disclosure: Timothy Sykes and TIM have no position.
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