My understanding is that the meters(or maybe the 3G components)need to be replaced/upgraded about every 5-6 years.
This and the NBN will be nice earners for NTC over the next year or so but the reality is, Australia is such a small market, these things will be insignificant when the orders from the oversea carriers start rolling in.
Back in March I teleconferenced into one of the Broker Roadshows of NTC. They were referencing the possible use of M2M technology. They specifically mentioned elevators. After the Kone order with Vodafone, a friend of mine called the company. The outcome of this call was that NTC confirmed that the specific device they have designed for Vodafone is not suitable but a device would be designed, purpose built so to speak. The company (due to it's contractual obligations with vodafone(my take)) can not confirm that they are the ones designing the purpose built device.
Given elevators were mentioned at the broker roadshow and the Kone order came on so quickly after that,if I was a betting man I would be having a wager on NTC doing the elevator work. As it is specifically designed the price point and margin is likely to be higher than just the generic device too IMHO.
I have held this stock since the capital raising mid last year and more than doubled my holding in Nov/Dec last year, It's Balance Sheet is far weaker than a company I would usually invest in but the tailwinds made it a compelling investment for me.
This stock could be anything IMHO, but just to temper your excitement a bit, NTC has had numerous opportunities in the past and haven't done well, They actually have been a terrible business for the last 15 odd years. Will the M2M tailcoat strategy alter that in the future? Time will tell I guess. For the time being my money says it can.
DYOR
NTC Price at posting:
71.0¢ Sentiment: LT Buy Disclosure: Held
