Bear of the Day: CalAmp (CAMP)

Zacks

CalAmp (CAMP) is a Zacks Rank #5 (Strong Sell) but it just recently became a #5 after being a Zacks Rank #3 (Hold) for the entire year. A recent earnings miss and lowered guidance has pushed it down and it is the Bear of the Day.

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As a wireless technology solutions provider, CAMP lost a connection with Wall Street following its most recent quarter. The stock dropped more than 25% in the session following the most recent earnings report.

The company missed the Zacks Consensus Estimate and lowered guidance on April 24, 2014. Revenues came in below expectations as well.

Company Description

CAMP makes wireless technology solutions that deliver data, voice and video for critical networked communications and other applications. The Company has two business segments: Wireless DataCom, which serves commercial, industrial and government customers, and Satellite, which focuses on the North American Direct Broadcast Satellite (DBS) market. CalAmp Corp. was founded in 1981 and is headquartered in Oxnard, California.

CAMP Sees Estimates Moving Lower

CAMP missed earnings and guided lower recently and that has impacted its Zacks Rank. The Zacks Consensus Estimate has move from $0.96 in March to $0.94 in April and skidded lower to $0.90 following the earnings report.

2015 also had a significant drop, as the Zacks Consensus Estimate moved from $1.22 to $1.13.

Valuation

Following the miss, lowered guidance and significant drop in share price, CAMP is only now trading in line with metrics that investors commonly look to. The trailing PE of 22x is in line with the industry average, but the forward PE still shows CAMP trading at a premium. Visit the Zacks website to see the forward PE multiple of Zacks.

The Chart

The price and consensus chart is a great tool developed by Zacks. It shows how the stock has acted as the Zacks Consensus Estimate moves over time. The stock price was hitting highs not too long ago and has since been hit hard. Investors would be wise to wait until estimates start moving higher before they consider a purchase.

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Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of the Zacks Home Run Investor service, a Buy and Hold service where he recommends the stocks in the portfolio.

Brian is also the editor of Breakout Growth Trader a trading service that focuses on small cap stocks and also carries a risk limiting strategy. Subscribers get daily emails along with buy, and sell alerts.

Follow Brian Bolan on twitter at @BBolan1


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