Radiant Systems (NASDAQ: RADS) provides
hardware systems and software used to manage site operations in a variety of retail settings. Products include touch-screen point-of-sale devices, self-service kiosks, integrated back-office systems and centralized data management systems designed for use in restaurants, cinemas, convenience stores and general retail locations. Customers include Exxon Mobil (NYSE: XOM), Home Depot (NYSE: HD) and Kroger (NYSE: KR).
Investors were pleased last week, when SunTrust offered a positive assessment of the firm's prospects and then the company issued a positive quarterly summary. Management reported Q4 EPS of 27 cents and revenues of $70.3 million. Analysts had been expecting 22 cents and $68.9 million. The company also guided Q1 EPS to 15-16 cents (16 cent consensus), Q1 revenues to $60-$70 million ($63.61M consensus), FY08 EPS to 84-86 cents (76 cent consensus) and FY08 revenues to $305-$308 million ($282.45M consensus). Wedbush Morgan subsequently reiterated its "buy" rating on the shares.
The stock
popped through major moving average resistance on the news and then settled into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers recommend the issue with two "strong buys" and three "buys". Analysts see a 21% average annual growth rate, through the next five years. The RADS Price to Sales ratio (2.03) and EPS Growth rate (58.82%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 80% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $11.00 and $18.33. A stop-loss of $13.90 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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