Today’s Daily Alert brings the first of your Top Picks for 2013 mid-year updates. Your first update comes from Contra the Heard Editor Benj Gallander, who chose Iteris, Inc. (ITI) as his Top Pick back in January. Here’s his current opinion on the stock.
“Traffic flow specialist Iteris, Inc. (ITI, NYSE) has trundled up a tad since being chosen as our top pick. It likely would have risen further except that the bottom line this past quarter was only mildly black, with net income of $56 thousand, down from $356 thousand last year. However, by all other metrics the company is moving forward.
“Revenues increased 4% cent to $15.9 million. Debt was completely eliminated. Cash trended upward to almost $20 million and that was after a share buyback of a further 664,000 shares. Insiders are motivated for success not only because of their salaries, but because they own almost 28% of the stock. A major metric going forward is the backlog, which increased 9% to $38.6 million.
“While ITI’s technology is an important component of roadways that continue to become more and more congested, if the driverless car vision that some foresee does come to pass, this enterprise’s expertise will move even further to the front lines. The initial sell target is $3.49, far below where the company used to trade. The industry remains ripe for consolidation and Iteris could prove a target.”
Benj Gallander, Contra the Heard Investment Letter, www.contratheheard.com, 416-410-4431, July 2013