Chardan Thinks CalAmp Stock Is A Buy

• Shares of CalAmp Corp. CAMP have been volatile in 2015 and are down 2 percent in the last one month.
• Chardan Capital’s Marc Estigarribia initiated coverage of the company with a Buy rating and a price target of $24.
• The company is poised to benefit from the increasing adoption of Internet-based devices and growth opportunities in the wireless communications segment, Estigarribia said.

CalAmp, a leading provider of wireless communications solutions to key industrial end-markets, is well positioned to benefit from the growth opportunities in the IOT / M2M [Internet of Things/ Machine-to-Machine]. Analyst Marc Estigarribia expects the underlying Wireless Datacom industry to be driven by the increasing adoption of Internet-based devices.

The company is also expected to benefit from emerging opportunities in niche areas like insurance and heavy equipment telematics. “We expect CalAmp’s stable growth prospects, sound leverage and healthy cash flow generation ability, and margin expansion prospects to drive our target multiple’s expansion from its current levels,” Estigarribia added.

CalAmp has high exposure to a variety of industrial end-markets, such as fleet management, energy, automobile and transportation and a vast customer base. The analyst added that the company’s core market TAMs are expected to grow at a CAGR of around 14 percent through 2017.

The company’s shares currently trade at a 17 percent discount to its peer group. Potential catalysts that may boost CalAmp’s stock performance include a potential strategic acquisition, new customer wins and a possible divestment of its Satellite business. “We believe that these factors could be the catalysts to push the stock price above the elusive $20 price range,” Estigarribia stated.