![]() The use of a unique radio frequency in contrast to GPS is significant for several reasons - RF signals can penetrate concrete, containers and other objects used by thieves to break or impede GPS signal transmission, meaning a higher success rate and recovery rate for stolen vehicles - which the company cites at 90% in the United States. Their location is unknown to consumers and many would-be thieves, reducing the chances of the units being identified and removed from the vehicle.Ī key advantage of LoJack against its competitors is that it uses RF signals instead of relying upon GPS. LoJack unites are also covertly installed in customers vehicles at participating dealerships by selected technicians. The company provides tracking units to law enforcement agencies free of charge to help facilitate the system, something that I believe indicates a significant barrier to entry for future competitors given the relationships that have been cultivated by the company over the life of the company. If the theft is reported in a jurisdiction where the LoJack System is operational, a unique radio signal is automatically transmitted to the LoJack Unit in the stolen vehicle, activating its tracking signal." In the United States, the LoJack System is comprised of three components: (1) a Registration System, which we maintain and operate (2) a Sector Activation System, or SAS, and Vehicle Tracking Units, collectively the Law Enforcement Components, each maintained by us and operated by law enforcement officials and (3) a LoJack Unit, which is installed in customers' vehicles or equipment.If a vehicle equipped with a LoJack Unit is stolen, its owner reports the theft to the local police department. "The LoJack Stolen Vehicle Recovery System, or the LoJack System, is based on RF technology. When subtracting the cash on the balance sheet - the company trades slightly under a 4x FCF multiple. ![]() Despite losing money (due to expensive and extensive litigation which I will discuss later in this article), the company generates significant Free Cash Flow. Insider ownership in the enterprise currently stands at 9.5% and the company pays no dividend. Currently priced at $4.02 per share, the company has $2.65 of cash (slightly over $45 Million) - roughly three times the amount necessary to totally satisfy its debt obligations of $15 Million. With a market capitalization of $75 Million, this company is tiny - a shadow of its former glory a decade ago. Now I am faced with attempting to establish if the company has gone from "a steal to a bargain" or "a bargain to fairly valued." I believe given the company's valuation - which is still at historic lows, combined with two significant catalysts, indicates the former. ![]() ![]() I found a company with robust cash flow, a good product, a huge cash position, areas of potential expansion and significant pending litigation.Īs I was waiting to make a move, the company rallied 22% in a single trading day. To deliver myself from this state of unknowing, I hunkered down and started into the company's filings in order to see what I could glean. Even though it had a big brand name, it was difficult for to figure out just how it made money. For a Value Investor - it seemed like a dream: The company was trading near a multi decade low, it had a lot of cash relative to its debt obligations, it was having problems, it was thinly followed. I was surprised this company even existed as a publicly traded entity - as I have been familiar with the company's service and brand for years. One company that I recently discovered (two weeks ago) was the LoJack Corporation ( NASDAQ: LOJN). If you have been following my articles, you will have noticed my work on the WD-40 Company and Scotts Miracle Gro - two brand names which are almost ubiquitous in everyday life yet by virtue of their small market capitalizations often go unnoticed by many investors. I often find myself looking for companies that are relatively small in market capitalization but have a "big" brand name.
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