Colchester-based Concurrent Technologies Plc (CNC.L) develops and manufactures high-end embedded computer products for use in a wide range of high performance applications within the telecommunications, defence, security, telemetry, scientific and aerospace markets. Using mainly Intel® processors, including the latest generation Intel® Core™ i7 processors, Intel® Xeon® and Intel® Atom™ processors, the Company offers a wide range of computer products which are designed to be compliant with industry specifications including those for products used in extremely harsh environments. Other processors now include NVIDIA® Tegra® K1 devices.
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On December 21st 2017, CNC published a trading update for the year ending 31 Dec 2017, and confirmed that it expects trading for 2017 to be broadly in line with market expectations. On March 8th 2018 CNC confirmed it would pay a second interim dividend of 1.30p per share on March 29th. Following a series of new product launches and developments during Q1 2018, CNC confirmed that full year results are to be published on April 4th 2018.
The nascent value within CNC triggered an RV (Relative Value) charting move in December 2017, which has continued to build during Q1 2018 on the back of multiple product launches. RV is an indicator of long-term price appreciation potential where CNC now scores 1.47, an excellent number on a scale of 0.00 to 2.00. CNC also scores an excellent GRT (Earnings Growth Rate) of 27%, and while the RS (Relative Safety) metric only registers a fair rating of 0.95 (scale of 0.00 to 2.00), trading at 83p the stock is still way below the current VectorVest valuation of 120p per share.
The chart of CNC.L is shown above over the past 15 months using my normal format. The share moved strongly upwards during March and April 2017 ahead of the published earnings per share (EPS) results. Since this time the share has charted a double bottom formation which after an advance is a very bullish phenomena. The technical target from the double bottom formation is similar to the VectorVest valuation of 120p. The share is currently on a Buy recommendation on VectorVest.
Summary: Having hit year highs of 96p a year ago, the charting picture for this niche computer product manufacturer is now looking very bullish at the current 83p. The raft of product launches during Q1, plus a 4.8% increase in the full year dividend payout shows a company in steady rather than spectacular growth mode, but nonetheless VectorVest takes the view that CNC currently offers significant growth potential. Buy.
Dr David Paul
April 4th 2018
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