Digi gets new coverage, with a positive rating
Digi International Inc., the Minnetonka-based maker of machine-to-machine networking hardware, was picked up for coverage by Stephens Inc. analyst Tim Quillin last week.
Quillin's initial rating is "overweight," meaning he expects the stock to outperform its peers. Key to the rating was faith in new CEO Ron Konezny, who succeeded former CEO Joe Dunsmore in December. Konezny is a former vice president of the global transportation and logistics division of Trimble Navigation Limited.
"[Konezny] has set the state for long-term profitable growth in the emerging M2M/IoT market," wrote Quillin. "[He] has made a series of strategic decisions that we believe have set the stage for profitable growth."
M2M/IoT are abbreviations for machine-to-machine and Internet of things. Digi, which has 30 years of experience making wired and wireless networking solutions, has ideal experience for developing even more solutions for the ever increasing IoT market, it says.
According to Quillin, Digi has well over one thousand custom design projects that should give the company an advantage in designing new products for the emerging machine-to-machine communications market.
With more than $90 million in cash on its balance sheet and no long-term debt, Quillin is expecting Digi to put money toward acquisitions that would further broaden its M2M solutions.
Analyst: Target should invest in IT
Last week, Target Corp. announced another round of layoffs as part of its overall plan to save $2 billion in expenses by the end of fiscal 2017. The downsizings included 235 people in Target's information technology department in the Twin Cities.
Target told the Star Tribune last week that the information technology jobs being cut were mostly in the business analysis and project management areas but that a number of job openings were still open for information technology engineers.
Boston-based Trefis in a research report it published on Tuesday suggested much of that $2 billion in savings would be poured back into the investments in information technology, distribution and other areas.
"We believe Target has quite a transformation to undergo to keep its sales growth ticking. The company's efforts are evident from its increasing investments in information technology, distribution, and other areas," Trefis analysts wrote. "In fact, the $2 billion that will be saved via cost reductions will primarily be invested in this transformation to make Target a multichannel retailer."