It's not easy finding stocks that are on the cutting edge of their industry, publicly traded, and poised for more growth. Sierra Wireless (NASDAQ: SWIR ) is a quiet tech company that's leading the machine-to-machine communication market, also called the Internet of Things, and its upside can't be overlooked.
Although Sierra has been on Wall Street since 2000, its business has shifted since then, with some of its technology now powering innovations in Tesla's (NASDAQ: TSLA ) Model S. And as the company's focus has shifted over the years, so has its potential.
So, Sierra does what exactly?
Let's keep this simple. If the Internet of Things, or IoT, is the connection of everyday objects ...view middle of the document...
And Sierra Wireless is in a great position to do it.
Right now, Sierra Wireless holds about 34% of the embedded cellular M2M module business worldwide.
Although it has worldwide IoT reach, the company is still nimble with a market cap under $700 million, $180 million in cash, and virtually no debt. In its fiscal fourth quarter 2013, ending in February, Sierra posted revenue of $118.6 million, up 8.4% year over year. Revenue for the full fiscal 2013 year hit a record high of $441.9 million, up 11.2%.
The upside for Sierra is that it recently sold its AirCard business, which was dragging down its focus on the Internet of Things. Sierra's CEO, Jason Cohenour, said in an earnings statement that:
We achieved record revenue in the fourth quarter, closing out a year in which we delivered solid operational results, sold our AirCard business, and began putting the proceeds to work on acquisitions that extend our leadership position in M2M.
Just a few weeks ago, the company completed its purchase of a company called In Motion for $21 million. The company made rugged in-vehicle mobile routers and a secure platform to manage connected devices. Because of the acquisition, Sierra said it now has "the products, channels, and technology needed to offer the most comprehensive suite of solutions to our customers and expand our market share in high growth, high value markets such as public safety and commercial fleets." In 2013, In Motion generated $15 million in revenue, and its gross margin was 50% of revenue.
In addition to its M2M leadership position, the company just launched a new open source platform named Legato. The new platform allows companies to develop...