The personal computer, the cell phone and the Internet revoÂlutionized the way we live and do business. We’re now on the cusp of another paradigm shift: Machine-to-Machine (M2M) technology.
M2M devices communicate with each other through a central server, without a human being as intermediÂary. They use sensors to transmit valuÂable data—such as fuel levels, room temperatures or inventory capacities— through a wired or wireless network to a software application.
The software application translates the data for meaningful action. For example, if the data exchange indicates that a refrigerated locker is getting too warm, the system will make a temperÂature adjustment—automatically and without a person getting involved.
M2M remotely connects a wide vaÂriety of machines into a complex comÂmunications matrix. Major applicaÂtions today include utility meters, fuel tanks, vehicle fleets, point of sale scanÂners, and medical instruments in a hospital. M2M also automates the deÂlivery of services and billing, making them more efficient and cost-effective.
During the last decade, M2M “smart meters” have transformed the utility industry. Technology research firm IDC predicts that shipments of smart meters to utilities will grow nearly 112 percent by the end of 2012 compared to 2011.
Under conventional technology, a reÂmote network of machines sends data to a centralized hub for human analysis and action. M2M not only elimiÂnates the flesh-and-blood middleman; it also fosters an integrated web of networks that can communicate with smartphones and other mobile devices. M2M networks dramatically reduce the cost, time and energy required for data transfer, opening new opportunities for businesses—and investors.
What’s more, the M2M sector is still relatively new with huge opportuÂnities for future growth, as the use of mobile telecommunications explodes around the globe.
The purest play on this trend is Digi International (DGII, Financial), headÂquartered in Minnetonka, Minnesota. Founded in 1985, Digi is the pioneer in the creation of M2M devices and platform solutions. Digi also provides the most sophisticated line of celluÂlar gateways specifically designed for M2M applications.
The company’s iDigi Manager is the world’s first ready-to-use cloud computing platform for M2M netÂwork management. The cloud is web-based computing that allows orgaÂnizations to enhance IT capabilities without creating infrastructure, hirÂing new personnel or buying software. The company’s product uses the cloud to weave all of these communications strands into a seamless fabric.
Tech research firm Yankee Group expects the number of cellular connecÂtions in the US dedicated to M2M applications to nearly triple over the next five years. Cellular carriers are embracÂing M2M, because carriers can offer it as part of a cellular package to both customers and businesses. By getting onto the M2M bandwagon, carriÂers serve as the data carriage, garnerÂing a fee for transmitting information to and from the remote devices. Some cellular carriers already offer M2M services and their number is growing.
Digi has emphasized M2M since the company’s inception, a focus that has given it technological dominance and a jump on future competitors. What’s more, the stock is now selling at a bargain.
Digi’s earnings results for the third fiscal quarter of 2012 disappointÂed analysts and pushed down the stock, but secular trends remain in the company’s long-term favor. On July 26, Digi reported third-quarter earnings of $2.3 million, compared to $3.6 million in the year-ago comÂparable quarter.
Third-quarter revenue was $47.6 million, compared with $54.3 milÂlion for the same quarter a year ago, a decrease of $6.7 million, or 12.3 perÂcent. Third-quarter operating expensÂes were $23.2 million, or 48.7 percent of revenue, compared to $22.6 milÂlion, or 41.6 percent of revenue, in the year-ago quarter.
Lower revenue in the third quarÂter resulted from diminished sales of legacy products that the company is now updating for rollout in 2012 and beyond.
In March, the company announced a partnership with Wind River to deliver Digi’s new family of cloud-connected wireless M2M solutions. Dubbed the M2M Solution BuildÂer kits, these offerings will include a combination of hardware, software and cloud connectivity.
Wind River, a wholly owned subÂsidiary of Intel Corp (INTC, Financial), is a world leader in embedded and moÂbile software. According to IDC, inÂtelligent M2M systems will account for more than one-third of the volÂume of all embedded systems worldÂwide by 2015.
Digi’s stock is now trading at a price-to-earnings (P/E) ratio of about 26, slightly lower than its industry group and an attractive valuation in light of its growth prospects.
By using the company’s products, businesses or government agencies can connect electronic devices from any remote location via a public online connection, Virtual Private Network (VPN), the cloud, satellite network, or cellular carrier.
Among the company’s key offerings is the iDigi Manager, an end-to-end solution that liberates the customer from maintaining an in-house infraÂstructure. All of the system’s comÂponents, such as gateways and radio frequency routers, are provided in a ready-to-go, turnkey package. The iDigi Manager is offered on-demand, which means customers only pay for services as they use them, resulting in significant cost savings.
The iDigi Manager is a proprietary and unique system that maintains an account of each device’s perforÂmance and connection status, makÂing it fast and simple for customers to tap into all information relevant to their subscriptions. For more growth stocks picks, check outTop Growth Stocks to Own Now.
M2M devices communicate with each other through a central server, without a human being as intermediÂary. They use sensors to transmit valuÂable data—such as fuel levels, room temperatures or inventory capacities— through a wired or wireless network to a software application.
The software application translates the data for meaningful action. For example, if the data exchange indicates that a refrigerated locker is getting too warm, the system will make a temperÂature adjustment—automatically and without a person getting involved.
M2M remotely connects a wide vaÂriety of machines into a complex comÂmunications matrix. Major applicaÂtions today include utility meters, fuel tanks, vehicle fleets, point of sale scanÂners, and medical instruments in a hospital. M2M also automates the deÂlivery of services and billing, making them more efficient and cost-effective.
During the last decade, M2M “smart meters” have transformed the utility industry. Technology research firm IDC predicts that shipments of smart meters to utilities will grow nearly 112 percent by the end of 2012 compared to 2011.
Under conventional technology, a reÂmote network of machines sends data to a centralized hub for human analysis and action. M2M not only elimiÂnates the flesh-and-blood middleman; it also fosters an integrated web of networks that can communicate with smartphones and other mobile devices. M2M networks dramatically reduce the cost, time and energy required for data transfer, opening new opportunities for businesses—and investors.
What’s more, the M2M sector is still relatively new with huge opportuÂnities for future growth, as the use of mobile telecommunications explodes around the globe.
The purest play on this trend is Digi International (DGII, Financial), headÂquartered in Minnetonka, Minnesota. Founded in 1985, Digi is the pioneer in the creation of M2M devices and platform solutions. Digi also provides the most sophisticated line of celluÂlar gateways specifically designed for M2M applications.
The company’s iDigi Manager is the world’s first ready-to-use cloud computing platform for M2M netÂwork management. The cloud is web-based computing that allows orgaÂnizations to enhance IT capabilities without creating infrastructure, hirÂing new personnel or buying software. The company’s product uses the cloud to weave all of these communications strands into a seamless fabric.
Tech research firm Yankee Group expects the number of cellular connecÂtions in the US dedicated to M2M applications to nearly triple over the next five years. Cellular carriers are embracÂing M2M, because carriers can offer it as part of a cellular package to both customers and businesses. By getting onto the M2M bandwagon, carriÂers serve as the data carriage, garnerÂing a fee for transmitting information to and from the remote devices. Some cellular carriers already offer M2M services and their number is growing.
Digi has emphasized M2M since the company’s inception, a focus that has given it technological dominance and a jump on future competitors. What’s more, the stock is now selling at a bargain.
Digi’s earnings results for the third fiscal quarter of 2012 disappointÂed analysts and pushed down the stock, but secular trends remain in the company’s long-term favor. On July 26, Digi reported third-quarter earnings of $2.3 million, compared to $3.6 million in the year-ago comÂparable quarter.
Third-quarter revenue was $47.6 million, compared with $54.3 milÂlion for the same quarter a year ago, a decrease of $6.7 million, or 12.3 perÂcent. Third-quarter operating expensÂes were $23.2 million, or 48.7 percent of revenue, compared to $22.6 milÂlion, or 41.6 percent of revenue, in the year-ago quarter.
Lower revenue in the third quarÂter resulted from diminished sales of legacy products that the company is now updating for rollout in 2012 and beyond.
In March, the company announced a partnership with Wind River to deliver Digi’s new family of cloud-connected wireless M2M solutions. Dubbed the M2M Solution BuildÂer kits, these offerings will include a combination of hardware, software and cloud connectivity.
Wind River, a wholly owned subÂsidiary of Intel Corp (INTC, Financial), is a world leader in embedded and moÂbile software. According to IDC, inÂtelligent M2M systems will account for more than one-third of the volÂume of all embedded systems worldÂwide by 2015.
Digi’s stock is now trading at a price-to-earnings (P/E) ratio of about 26, slightly lower than its industry group and an attractive valuation in light of its growth prospects.
By using the company’s products, businesses or government agencies can connect electronic devices from any remote location via a public online connection, Virtual Private Network (VPN), the cloud, satellite network, or cellular carrier.
Among the company’s key offerings is the iDigi Manager, an end-to-end solution that liberates the customer from maintaining an in-house infraÂstructure. All of the system’s comÂponents, such as gateways and radio frequency routers, are provided in a ready-to-go, turnkey package. The iDigi Manager is offered on-demand, which means customers only pay for services as they use them, resulting in significant cost savings.
The iDigi Manager is a proprietary and unique system that maintains an account of each device’s perforÂmance and connection status, makÂing it fast and simple for customers to tap into all information relevant to their subscriptions. For more growth stocks picks, check outTop Growth Stocks to Own Now.
