Rimage Corporation: CD/DVD recorders for the business community

The company surprised investors late last month, when it reported fourth quarter EPS of 34 cents and revenues of $30.5 million. The Street had been looking for 25 cents and $24.2 million. Dougherty raised its price target on the shares from $27 to $33, saying that the firm's cash position and core growth trends create a favorable outlook for RIMG shares. The news kept the issue cycling through a positive five-month trading channel. The price is currently consolidating near the base of that channel, where oversold Momentum, CCI and MACD technical parameters suggest the potential for a rise back toward the top. Correspondence of the stock's 90-day moving average to the base of the channel backs the rebound notion.

The brokerage community recommends RIMG with a "strong buy." The Street sees a 17% average annual growth rate, through the next five years. The RIMG P/E ratio (20.58), PEG ratio (1.25), Price to Sales ratio (2.49), Sales Growth rate (25.77%), EPS Growth rate (57.99%) and Net Profit Margin (12.67%) compare favorably with industry, sector and S&P 500 averages.

Institutional investors hold about 57% of the outstanding shares. Over the past 52 weeks, the stock has traded between $17.52 and $28.74. A stop-loss of $22.60 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.