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NCR Corporation (NCR)
you’ve been around the markets
long enough, you may remember this company as National Cash
Back in the 1800’s, they were in the business
of making quality mechanical cash registers that were cutting edge and
merchants make transactions more efficient.
new age, they have not only
evolved to meet the current needs of companies around the world, they
thrived and created a new image and mission, while sticking to their
roots of efficiency.
company that is over 125 years
old, NCR may still have some growth and momentum left in it. Recently,
reported stellar financial results for the fourth quarter of 2011. NCR
revenue of $1.64 billion, which was a 17 percent jump from the fourth
2010, on both an actual and a constant currency basis. They
reported strong cash flow growth, with
operating cash flow of $270 million and free cash flow of $229 million.
may be an old dog with some new
tricks yet to come.
Description & Developments
NCR is at the center of the self-service revolution, strategically
consumers who demand fast, easy and convenient
They are in many ways a “transaction
facilitator.” Their main products are
self-service kiosks, point-of-sale terminals, ATMs, check processing
scanners, and business consumables for all types of
They also provide IT maintenance support
services. NCR was granted the patent for the electronic signature
As consumers strengthen and more of our world goes digital,
NCR may have
some more time to bask in the sun.
They recently sold their entertainment division to Coinstar,
which was part
of the Verizon / Redbox partnership and a win for NCR. They
key there was not so much in the profits
from the sale, but in the management of those kiosks. Moving
forward, their growth depends on more
transactions, further automation of those transactions and partnerships
willing businesses; all of which seem to
be the trend as NCR is continuing to sign on new customers around the
Another attractive statistic was that they showed over a
billion dollars in
backlog business, up 14% from the prior period at their last earnings
report. This shows continued demand for their business
and a steady income stream for months to come.
NCR is a mid-cap (3.34 billion) company that is trading at about 70
trailing earnings (P/E). This makes it a bit expensive when
it to the broad market average for now. Expectations
are calling for that number to drop below 10 with no change in price
next year according to Zacks Consensus Estimates.
became a Zacks Rank 1 strong buy
on February 9th after their strong results on February 7th.
technology company reported a
quarterly sales increase of 17% at their last earnings
sales were up 16.5% compared to Q42010 with total sales of roughly 4.8
in FY2010. NCR earnings leapt from a 21 cent loss to an 83
from FY2009 to FY2010; they made $2.18 in 2011.
NCR is expected to earn $2.41 in FY2012 according to the Zacks
The majority of analysts raised estimates higher for the coming
well as FY2011 and FY2012 over the past 30 days. Three
analysts out of 10 lowered estimates
for Q12012. NCR will report Q12012 results on April 26th.
Expectations are for NCR to generate
$0.36 in income this quarter. Of the 10 analysts who cover
consensus is for the company to grow earnings by 25% in the current
and roughly 8.5% in FY2013.
terms of the magnitude of analyst
estimate trends, we are seeing all of the consensus estimates higher
were 90 days ago for the current and next quarters as well as FY2012
beat estimates last quarter by 14%
and had beat in the prior two quarters. For Q12011, they had a huge
Market Performance &
NCR struggled a bit in the last half of 2011.
In January, share began their upward march and started gaining real
momentum in the past 3 weeks leading up to their report in early
the positive results, the
stock managed to break into new 52 week high territory and topped out
before backing off a bit.
is now above its 50 and 200 day
moving averages of $17.46 and $18.04 respectively. Being that
the 200 is still on top of the 50,
that tells us the sideways trend quickly reversed and may not be as
strong. There should be support at the
has exceeded the S&P 500’s
performance by over 10% in the past year and over 10% in the past 3
months. With its recent run-up, NCR is ahead of the
S&P by over 22% in the last 30 days alone!
Remember that NCR will be closely tied to consumer health and spending
habits and will respond accordingly to data in those areas.
A Levy is the
Momentum Stock Strategist for Zacks.com. He is also the Editor in
charge of the
Whisper Trader Service.