Thursday, February 12, 2009

Update: Ruggedcom a Smart Grid Company

Ruggedcom (ticker: RCM in Toronto) was the first company I discussed on this blog. The company reported its third quarter financial results last night and had a conference call this morning. Overall, the results were impressive.
  • Revenues were up 53.4%.
  • Consensus was expecting earnings per share of $.21 and the company reported $.033.
  • Gross margin was up strongly to 65.7% due to improved product costs, favorable sales mix and foreign exchange.
  • The company generated cash once again. The cash on the balance sheet declined slightly but it was a foreign exchange effect.

A few things to consider. In the past few weeks, this company has been hyped on television or in newspapers by a number of "experts". Hype can be a problem, especially for companies with volatile quarterly results. One weak quarter and all the "fast" money would want to exit at the same time. It is a problem but it can also create a buying opportunity. One last tidbit, I would not be surprised if one day Cisco buys Ruggedcom. Keep this one on you radar screen.

2 comments:

EasyLearnStockMarket.com said...

How is the US volatility affecting the Toronto market?

Canadian Small Cap said...

We have a lot more exposure to commodities in our market so this creates its own level of volatility. Also, our financial institutions appear to be a better shape than yours. As such, we have not seen the same kind of collapse as you.