Eight Months’ Work
Give yourself a pat on the back if you bought some of the 5.2 million shares CalAmp Corp. (CAMP) sold to the public in late February at $9.25; eight months later that stock’s worth an additional 175%. Heck, it’s gained 48% in the last month alone. To say it’s on fire would be an understatement. It’s now trading at levels it hasn’t seen in 13 years.
CalAmp provides wireless communications solutions to customers around the globe. In February it raised $45 million from its share offering in order to close its $53 million acquisition of Wireless Matrix, a Virginia-based GPS fleet-tracking business that generates approximately $30 million in annual revenue with much of it the high-margin, recurring kind. In addition to vehicle tracking, it can provide insurance companies with the equipment necessary to offer usage-based insurance rates. (A friend of mine drives no more than 5,000 miles per year. He and many others would be all over this despite the privacy concerns.)
CalAmp’s had a number of setbacks over the years — a public company since 1983 — but something is different about its latest move. Revenues and profits are growing nicely, including promising forays internationally with firms like Caterpillar (CAT), which requires rugged equipment to track machines all over the world. It won’t surprise me if CalAmp is a mid-cap stock in three to five years, far removed from its current small-cap status.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.