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Friday, February 28, 2014 5:19:04 PM
BY John Mylant | 02/28/14 - 10:06 AM EST
NEW YORK (TheStreet) -- Logitech (LOGI_) has seen a stunning increase in the value of the stock through the second half of 2013 along with consecutive positive earnings surprises. Why is the stock doing so well?
It has had four straight quarters of earnings surprises where it beat analyst expectations. Something good has been happening just recently. Its last report in January saw the company beat analyst expectations in earnings, revenue and margins, a rarity for companies to do. Its shares are up 18% for the year to date as of its Thursday close of $16.16 compared with the Standard & Poor's 500, up 0.3% for the same period. Shares currently trade around $16.
Let's look at the company's performance over the last four quarters.
It appears Logitech is in a "turnaround" journey after years of mediocre performance. I believe the 2014 fiscal year supports the turnaround, at least the numbers do. It is planning its growth in the mobile market.
Why It has Suddenly Done Well
The company has been in a restructuring mode since 2012. There have been a number of steps the company has taken to move back into profitability and this includes:
?Reinvigorate the product portfolio
?Eliminated layers of business and sales management that wasn't needed
?Brand and portfolio management will also be reorganized
?Other functions are also been streamlined
Restructuring is expected to save the company $80 million in annual operating costs.
The company expected to benefit in three different ways as fiscal 2013 unfolded:
?A stronger product portfolio
?Simplifying organization processes
?Cost savings from restructuring
These things were to lead to better financial performance through 2013.
According to its investor presentations, we can see how in the last five quarters, the company's expectation of a better financial performance has really panned out. It has substantially beat analyst earnings estimates.
?December 2012: (Est. 0.34) (Act. 0.10) -70.59%
?March 2013: (Est. -0.12) (Act. -0.09 ) +25%
?June 2013: (Est. -0.11) (Act. 0.02) + 118.18%
?September 2013: (Est.0.05) (Act. 0.17) +240%
?December 2013: (Est. 0.14) (Act.0.32) +128.57%
This is one of the reasons the company has grown so much since July 2013.
Product Development Is the Key
The company's recent success may be attributed to the new product line for better enhanced customer satisfaction with the new Apple (AAPL_) iPad keyboard.
LOGI's new wired keyboard for the iPad will solve many problems that teachers face in schools. iPads have become more popular as they are being purchased by schools but they have also had to attempt to put together multiple wireless Bluetooth keyboards. Logitech's plug-in keyboard has full size keys, is durable as well as spill-resistant. It came out last year and recorded sizable sales.
It is in the mobile market that the company continues to focus its new products, slowly moving away from the desktop like other companies.
It intends to focus on penetrating the mobile market with accessories. Its "Keyboard Folio" and "Keyboard Folio Mini" are tablet and gaming accessories that are expected to create revenue long-term. In 4Q 2013, tablet accessories represented increased sales by 332% over the previous year with a total of $30.8 million.
With this in mind, it looks like the company is going to continue to perform well in the wireless industry. Its recent track record over the last year certainly backs up the quality of its products and shows that consumers are very interested. One cannot argue with numbers.
This company's productivity is doing well since it moved in the mobile market.
If you are interested in investing in Logitech, I would look to enter upon a dip. It has recently climbed at a 60% grade and I don't believe can keep up this level of growth. Usually, the steeper the grade; the steeper the correction.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
Recent LOGI News
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 07/17/2024 12:44:50 AM
- Alphabet Nears $23 Billion Wiz Acquisition, Trump Media Stock Soars 63% Pre-Market, and More • IH Market News • 07/15/2024 10:34:36 AM
- BP Slashes Profit Forecast by $700 Million; Morgan Stanley Predicts S&P 500 10% Drop, and More News • IH Market News • 07/09/2024 10:54:32 AM
- Logitech G Launches LIGHTSPEED Gaming Mouse for All Players • Business Wire • 07/09/2024 07:03:00 AM
- Form PRE 14A - Other preliminary proxy statements • Edgar (US Regulatory) • 07/08/2024 08:42:04 PM
- Apple Joins OpenAI Board, Logitech President Opts Out of Reelection, and More News • IH Market News • 07/03/2024 10:59:39 AM
- Logitech Announces Date for Release of First Quarter Results for Fiscal Year 2025 • Business Wire • 07/02/2024 08:05:00 PM
- Logitech Proposes Board Member Changes • Business Wire • 07/01/2024 08:05:00 PM
- The Rugged Ultimate Ears EVERBOOM: Superior Sound That Is Waterproof, Dustproof and Floatable • Business Wire • 06/26/2024 07:01:00 AM
- Introducing Logitech's G515 — A Next-Generation, Low-Profile Keyboard for High-Performance Gaming • Business Wire • 06/25/2024 07:01:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/19/2024 12:40:11 AM
- Form 3 - Initial statement of beneficial ownership of securities • Edgar (US Regulatory) • 06/19/2024 12:38:31 AM
- Introducing Logitech Keys-To-Go 2, an Ultra-Portable Keyboard for Tablets • Business Wire • 06/18/2024 07:01:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/13/2024 08:07:00 PM
- Logitech Expands Designed-for-Mac Portfolio for Seamless Integration with Apple Ecosystem • Business Wire • 05/30/2024 07:01:00 AM
- Form SD - Specialized disclosure report • Edgar (US Regulatory) • 05/23/2024 08:11:45 PM
- Logitech Sync Software Introduces Advanced Room Booking Features for Enterprises • Business Wire • 05/21/2024 07:01:00 AM
- Logitech Launches MeetUp 2, the AI-Driven, Sustainably-Designed Next Generation of Bestselling Video Bar for Huddle Rooms • Business Wire • 05/21/2024 07:01:00 AM
- Logitech Files Annual Report on Form 10-K • Business Wire • 05/16/2024 09:39:00 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 05/16/2024 08:42:24 PM
- Logitech Announces Proposed Fiscal Year 2024 Dividend • Business Wire • 05/14/2024 09:00:00 PM
- Logitech to Participate in Upcoming Investor Conference • Business Wire • 05/09/2024 09:04:00 PM
- NEW Logitech Combo Touch Available for the new iPad Air and iPad Pro • Business Wire • 05/07/2024 05:41:00 PM
- Logitech G Celebrates the 10th Anniversary of the Iconic G502 Gaming Mouse • Business Wire • 05/02/2024 07:01:00 AM
- Logitech Announces Q4 and Full Fiscal Year 2024 Results • Business Wire • 04/30/2024 01:01:00 AM
FEATURED Nightfood Holdings Signs Letter of Intent for All-Stock Acquisition of CarryOutSupplies.com • Jul 17, 2024 1:00 PM
Kona Gold Beverages Reaches Out to Largest Debt Holder for Debt Purchase Negotiation • KGKG • Jul 17, 2024 9:00 AM
Avant Technologies Welcomes Back Former CEO with Eye Toward Future Growth and Expansion • AVAI • Jul 17, 2024 8:00 AM
HealthLynked Expands Telemedicine Nationwide • HLYK • Jul 17, 2024 8:00 AM
Peer To Peer Network aka Mobicard™ Launches AI Investor Chatbot Boosting Engagement & Lead Generation on Ihub • PTOP • Jul 15, 2024 8:30 AM
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