This morning I will buy vehicle tracking software company Fleetmatics (FLTX) for the Growth Portfolio and Aggressive Growth Portfolio.
Fleetmatics has a software service that allows business owners to track their fleet of vehicles electronically, and see where each is on a map and is the market share leader in North America.
This service stops unauthorized vehicle use (including theft), wasteful idling, excessive overtime, visite to the girlfriend on the other side of town, etc. Companies save on gas and overtime.
The cost of the service for say a fleet of 16 vehicles is $35 to $40 each, and the company signs three-year contracts, which means recurring revenue and smoother earnings for FLTX.
I’ve been watching this stock all qtr, but waited to buy as many stocks are getting whacked after reporting earnings. FLTX is set to be up 6% at the open, which would cause the stock to break out and possibly go on a run higher.
As of 2015 Q2 the stock had an Est. LTG of 22% per year but has been growing much faster. The last 4 qtrs earnings growth was: -22%, +16%, +91% and +74% (not including this last qtr, which was also very strong). FLTX sells for around 40x earnings. I’ll update my spreadsheet later this month and post a complete research report.
My Fair Value as of Q2 was $51 for this year and $66 for 2016. The stock closed at $48 and has a 52-week and all-time high of $52 set last month.
