Public Companies Related To The Bar Code Industry - A Look at 3Q18 Results
Stock market volatility has been up in the last two years and it seemed like a good time to check on various companies in the bar code and RFID industries. With the recent release of a number of earnings reports, data wasn’t hard to come by. The Selection Process:
The public companies are either largely or somewhat in the bar code/ RFID/ label business. The non-profit entities are included because they are 100% part of the industry and secondly, their financial data is public. (Note - due to time constraints, the non-profits are not included today, but will be in a separate article next week.)
A word of caution - reputable industry sources like CNBC, Barrons, Nasdaq, TD Ameritrade and others were used to gather this information. Basic data - like a P/E ratio or gross margin sometimes varied widely. Readers should do their own due diligence before making any investment decisions.
Neither the Bar Code News, nor I, have any direct positions in any of these companies, with the exception that I probably own some index funds (like the S&P500 or Russell 2000) through unrelated third party management, that may include a company listed below.
The public companies:
(P/E, ROE, Gross and net margin data is TTM - 'trailing twelve months' unless otherwise noted.)
ScanSource - NASDAQ - SCSC
Market cap* (approx - varies daily) $1,014M (million)
P/E: 20 (sources varied from 20 to 30 - TD Ameritrade, CNBC, NASDAQ, Barrons)
ROE (Return on Equity): 5.93%
Gross margin (Trailing twelve months): 11.36%
Net Margin (TTM): 1.32%
Notes: For the quarter ending September 30th, 2018, which is their first quarter for fiscal 2019, ScanSource reported top line and bottom line growth.
(*Reminder - the data fluctuates daily)
Digimarc - NASDAQ - DMRC
Market cap: 246.42M
P/E: (below zero)
ROE: (below zero)
Gross margin: 59.75%
Net Margin (below zero)
Notes: Digimarc is the inventor of the invisible bar code and reported a 40% decline in YoY sales for the third quarter 2018.
Zebra Technologies Corp - NASDAQ - ZBRA
Market cap: $9.7B
P/E: 25
ROE: 37.49%
Gross margin: 46.53%
Net Margin: 9.25%
Notes: Zebra reported strong year over year growth in the third quarter.
Honeywell International Inc - NASDAQ - HON
Market cap: 109.8B
P/E: 26
ROE: 22%
Gross margin: 30.43%
Net Margin: 10.14%
Notes: The division that handles data collection - Safety and Productivity Solutions reported that sales for the third quarter were up 12 percent with expanding margins. - The division has gross sales of approximately $5.6 billion for the fiscal year 2017. For 3Q18, the division reported sales of $1.575B, with margins of 16%. The company has warned its partners about possible price increases due to tariffs.
Impinj Inc - NASDAQ - PI
Market cap: ~441M
P/E: (below zero)
ROE: (below zero)
Gross margin: 47.86%
Net Margin: (below zero)
Notes: Impinj saw its stock price reduced by 21% in October due to several large investors reducing their holdings. Presently the stock is above lows set earlier this year. Impinj reported a loss in the third quarter.
Intellicheck -NYSE - IDN pending - release date 11/14
Market cap: 35.5M
P/E: (below zero)
ROE: (below zero)
Gross margin: 90%
Net Profit Margin: (below zero)
Notes: Intellicheck was due to report 11/14/18, but the financial data has not been added to their website as of the morning of 11/16. We will update this article once the data is available.
Identiv Inc - NASDAQ - INVE
Market cap: 89.3M
P/E: (below zero)
ROE: (below zero)
Gross margin: 38.23%
Net Margin: (below zero)
Notes: Identiv reported third quarter results for FY 2018 with YoY revenue growth of 30%.
Cognex Corp - NASDAQ:CGNX
Market cap: 7.4 Billion
P/E: 28
ROE: 22.85%
Gross Profit Margin: 75.57%
Net Profit Margin: 33%
Notes: Cognex reported a decline in both top and bottom results for the quarter, when compared to the same quarter in the previous year, however it remained profitable. The company also increased its dividend.
Socket Mobile Inc SCKT:NASDAQ
Market cap: 10.9 M
P/E: (below zero)
ROE: (below zero)
Gross Profit Margin: 52.08%
Net Profit Margin: (below zero)
Notes: Socket Mobile reported revenue for the third quarter of 2018 was $4.1 million, a decrease of 24% compared to the same quarter last year.
Avery Dennison Corp AVY:NYSE
Market cap: 8.2B
P/E: 16.84
ROE (TTM): 44.49%
Gross Profit Margin (TTM): 26.80%
Net Profit Margin (TTM): 6.84%
Notes: Avery Dennison reported growth in the both the top and bottom lines for its third quarter 2018 compared to the same quarter in the previous year.
Summary: it is difficult to make detailed assumptions about the health of the bar code industry simply by looking at the results above. These companies all serve different market segments and some are hardware based with lower margins and some have most of their revenue from software or royalty sources. The broadly based companies appear to indicate a healthy growing industry, but we are only looking at one quarter and that quarter may have been unduly influenced by activity related to tariffs, such as dealers buying product ahead of tariffs. Such buying would not indicate growth but merely pulling future sales into a present quarter.
One thing seems clear - the larger companies are doing better than the small ones. In fact, none of the smaller companies ($250 million in market cap or less), were profitable this past quarter.
By Craig Aberle, owner and publisher.
Did we miss a company that should be here? How is your company doing? Let us know. Contact info is on the Footer menu below.
Disclaimers:
The information has been gathered from public sources only. Figures like market cap and P/E vary from day to day and even hour to hour, and were verified again at the time this article was published. Since market volatility may cause significant changes to the data daily, the reader uses this data at his/her own risk, without limit.
The various sources we used have somewhat varying data. We regret that there is such inconsistency in the public domain. Readers are welcome to notify us of any edits needed.
The various sources we used have somewhat varying data. We regret that there is such inconsistency in the public domain. Readers are welcome to notify us of any edits needed.
The author does not have any positions in any of these companies except possibly through index funds managed by unrelated third parties.
This column is not intended to provide financial advice and the reader is hereby cautioned that they should not rely on it for any such purpose.
The data of international companies has been calculated by using approximate exchange rates at the time the article was prepared.
Sources:
CNBC.com
NASDAQ.com
Barrons.com
TD Ameritrade
Individual companies websites and Investor pages
Guidestar.org - for non-profit companies
SEC.gov
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Top photo: Carlos Delgado [CC BY-SA 3.0] from Wikimedia Commons