Wednesday, January 22, 2014 11:54:24 AM
PRCP...3D printing and Robotics
A Takeover Candidate Poised To Benefit From Robotic And 3D-Printing Revolution
We believe PRCP is severely undervalued and should be valued at around $26.50 per share, which is up about 250 percent from current levels.
Perceptron, Inc. (PRCP) produces technology that is used in two of the fastest-growing industries, robotics and 3D printing. It has a low enterprise value of $60 million compared to its market cap of $92 million, and the company has $33 million in cash with no debt in a hot and growing industry. This makes PRCP an attractive acquisition target.
Could Lead To 75% Upside In 2014
We believe that shares of Perceptron Inc. (PRCP), the leader in image-based automated inspection technology, have 75% upside by the end of 2014. Our bullish thesis on Perceptron centers on Helix, the company's 3D sensor scanning technology, which has recently begun to enjoy accelerated adoption. On Thursday, January 9th, the company secured its largest order yet for Helix at one manufacturing site, a ~$5 million contract with, most likely, either BMW or Volkswagen.
Considering the tremendous leverage in the company's model as quarterly revenues trend above $20 million, we believe Perceptron has $1.20 in earnings power for its upcoming fiscal year ending June 30th, 2015. Increased adoption of Helix could propel Perceptron to $100 million in sales by its fiscal year ending June 30th, 2016 - a revenue line which could generate over $2 in earnings power.
With a record backlog of $35.9 million, almost $4 in cash, and an expected CAGR of 75% in earnings for its next two fiscal years, we believe PRCP's shares could see $30 by the end of this year, particularly with its scant 8.9 million share count. If Helix's adoption accelerates faster than we anticipate, an eventual move into the $40s or $50s could occur in 2015.
Taken together, we view Perceptron as a compelling asymmetric investment opportunity with minimal downside and tremendous upside. PRCP is one of our top picks for 2014.
PRCP
A Takeover Candidate Poised To Benefit From Robotic And 3D-Printing Revolution
We believe PRCP is severely undervalued and should be valued at around $26.50 per share, which is up about 250 percent from current levels.
Perceptron, Inc. (PRCP) produces technology that is used in two of the fastest-growing industries, robotics and 3D printing. It has a low enterprise value of $60 million compared to its market cap of $92 million, and the company has $33 million in cash with no debt in a hot and growing industry. This makes PRCP an attractive acquisition target.
Could Lead To 75% Upside In 2014
We believe that shares of Perceptron Inc. (PRCP), the leader in image-based automated inspection technology, have 75% upside by the end of 2014. Our bullish thesis on Perceptron centers on Helix, the company's 3D sensor scanning technology, which has recently begun to enjoy accelerated adoption. On Thursday, January 9th, the company secured its largest order yet for Helix at one manufacturing site, a ~$5 million contract with, most likely, either BMW or Volkswagen.
Considering the tremendous leverage in the company's model as quarterly revenues trend above $20 million, we believe Perceptron has $1.20 in earnings power for its upcoming fiscal year ending June 30th, 2015. Increased adoption of Helix could propel Perceptron to $100 million in sales by its fiscal year ending June 30th, 2016 - a revenue line which could generate over $2 in earnings power.
With a record backlog of $35.9 million, almost $4 in cash, and an expected CAGR of 75% in earnings for its next two fiscal years, we believe PRCP's shares could see $30 by the end of this year, particularly with its scant 8.9 million share count. If Helix's adoption accelerates faster than we anticipate, an eventual move into the $40s or $50s could occur in 2015.
Taken together, we view Perceptron as a compelling asymmetric investment opportunity with minimal downside and tremendous upside. PRCP is one of our top picks for 2014.
PRCP
“A man cannot directly choose his circumstances, but he can
choose his thoughts, and so indirectly, yet surely, shape his
circumstances. James Allen, As a Man Thinketh
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