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Cash-rich Vislink could double

Vislink is a leader in its field, growing fast and management is confident of hitting aggressive targets, but the share price has yet to catch up
July 18, 2013

After struggling through the recession and several years of restructuring, Vislink’s (VLK) products - wireless cameras, lightweight satellite terminals and surveillance equipment - are selling well and generating big profits again. It also boasts a hefty cash pile that account for over a fifth of the current market cap and ambitious targets to boost underlying operating profits by over 150 per cent by 2014. A to that the attraction of the shares' low rating and a tasty dividend more than twice covered by earnings, and it's no wonder directors have been buying shares. We think others should follow suit.

IC TIP: Buy at 32p
Tip style
Speculative
Risk rating
High
Timescale
Long Term
Bull points
  • Director share buying
  • New products selling well
  • On track to hit ambitious targets
  • Shares trade at discount to sector
Bear points
  • Lacks sales visibility
  • Acquisitive growth is risky

Vislink’s wireless cameras and compact encoder systems are used extensively in sporting events such as Formula One and Premier League football. In fact, it’s the market leader with about a 20 per cent share and management reckons about 70 per cent of all outside broadcast video is delivered by Vislink products. A reputation for technological superiority means the company is more resilient to pricing pressure, too.

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