On Dec 19, 2014, we issued an updated research report on Logitech International SA (LOGI), a global leader in peripherals for personal computers and other digital platforms.
Logitech has been benefiting from the growing adoption of new mobile platforms, such as tablets and smartphones in both mature and emerging markets. Further, the company, by pursuing innovation and expanding its product lines, is intending to tap the high potential market for accessories.
The company also remains focused on broadening its in-store presence across key regions, to meet the requirements of the globally trending demand. This promises strong growth prospects and will pave way for strengthening the company’s foothold in core operating regions.
Logitech’s mobile speaker business has been going strong for the past one year, driven by strength in the UE BOOM. Encouragingly, this has been the company’s highest-selling product in the second quarter of fiscal 2015. Moreover, the company’s increasing expertise in keyboards is likely to benefit its tablet accessories and PC gaming products, going forward.
Further, Logitech has been undertaking initiatives for restructuring operations and minimizing costs, which are already aiding the company’s profits and margins. This apart, a strong financial position and the company’s commitment to return value to its shareholders through dividends and share repurchases remains the positives.
However, declining popularity of desktop PCs, increasing competition in the end-markets and unanticipated shifts in consumer buying patterns are proving to be headwinds for the company.
Logitech currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the sector include Alps Electric Co. Ltd. (APELY), Mercury Systems, Inc. (MRCY) and Planar Systems Inc. (PLNR). All these stocks sport a Zacks Rank #1 (Strong Buy).
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