Advertisement
Singapore Markets closed

  • Straits Times Index

    3,290.70
    +24.75 (+0.76%)
     

  • Nikkei

    38,229.11
    +155.13 (+0.41%)
     

  • Hang Seng

    18,963.68
    +425.87 (+2.30%)
     

  • FTSE 100

    8,447.20
    +65.85 (+0.79%)
     

  • BTC-USD

    63,112.69
    +1,980.17 (+3.24%)
     

  • CMC Crypto 200

    1,304.44
    -53.57 (-3.95%)
     

  • S&P 500

    5,214.08
    +26.41 (+0.51%)
     

  • Dow

    39,387.76
    +331.36 (+0.85%)
     

  • Nasdaq

    16,346.26
    +43.46 (+0.27%)
     

  • Gold

    2,379.40
    +39.10 (+1.67%)
     

  • Crude Oil

    79.83
    +0.57 (+0.72%)
     

  • 10-Yr Bond

    4.4490
    -0.0430 (-0.96%)
     

  • FTSE Bursa Malaysia

    1,600.67
    -0.55 (-0.03%)
     

  • Jakarta Composite Index

    7,088.79
    -34.81 (-0.49%)
     

  • PSE Index

    6,511.93
    -30.53 (-0.47%)
     

NCR Corp (NCR) Trending Up: Time to Add to Your Portfolio?

Zacks Equity Research
Updated

NCR Corporation NCR is well poised on the growth trajectory, gathering momentum from its strong earnings history and solid fundamentals. Moreover, shares of the company have been trending upward, yielding a positive year-to-date return.

The company has been the global leader in self-service ATMs for several years in terms of market share. Per the latest report by global research company RBR Research, the global installed base of ATMs is expected to increase at a CAGR of 44.0% from 2012-2018, taking the worldwide ATM count to 3.7 million by 2018. These growth projections indicate financial institutions will expand their ATM base in the times ahead. This creates a huge opportunity for companies like NCR.

Demand for NCR’s POS system solutions is also on the rise among retailers and restaurant owners. These solutions automate bill payments and accounting, freeing managers for customer interaction instead, which leads to better productivity. NCR strengthened its position in the POS market through the acquisition of Radiant Systems in Aug 2011. In Jan 2013, NCR announced a strategic partnership with online and mobile payments solution provider, PayPal. We believe PayPal’s association will help drive the demand for its POS solutions. We believe, NCR, with its varied offerings of POS terminals and solutions, should be able to capitalize on these growth opportunities.

Given the popularity of the self-service concept, management has decided to expand beyond its traditional financial services markets to new industry verticals such as insurance, entertainment and gaming, healthcare, travel and hospitality, and the public and government sectors. NCR already provides self-service kiosks for the financial services, retail, hospitality, travel and gaming industries. The kiosks are well-equipped to support numerous retail self-service functions, including self-check in/out, way-finding (the self-service retail software application that helps customers easily locate products or navigate through large, complex buildings and campuses), bill payment and gift registries. These solutions create pleasant and convenient experiences for consumers and enable NCR’s customers to significantly reduce costs.

To add to the positives, the company has supplemented its business growth through acquisitions. On Jan 10, 2014, NCR completed the acquisition of Digital Insight for $1.65 billion. Prior to that, on Feb 6, 2013, NCR had completed the acquisition of Retalix. So far, the Retalix acquisition has bolstered its top line. We believe further acquisitions will add to NCR’s growth.

NCR recently got an investment from The Blackstone Group. According to the deal, Blackstone acquired a minority stake in NCR for $820 million with the right to appoint two members to NCR’s board. NCR will utilize some of the proceeds from the Blackstone investment to fund its previously announced share buyback program of a billion dollars. We believe that the proceeds from the sale will also be utilized to pay back part of its huge debt and enhance liquidity.

However, similar offerings from the likes of Diebold Corp. DBD and International Business Machines Corp. IBM keep the company’s profitability under pressure. Furthermore, the company’s tepid guidance for first quarter and full-year 2016, in view of lower revenue growth across its business segments due to unfavorable exchange rates, keep us on the sidelines regarding its near-term performance.

Currently, NCR carries a Zacks Rank #3 (Hold). A better-ranked stock in the broader technology sector is International Inc. LXK, with a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
INTL BUS MACH (IBM): Free Stock Analysis Report
 
NCR CORP-NEW (NCR): Free Stock Analysis Report
 
DIEBOLD INC (DBD): Free Stock Analysis Report
 
LEXMARK INTL (LXK): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research