The small-cap stock of Wireless Telecom Group Inc. (WTT) is up nearly 30% so far this year, outperforming the broader market. In the past 12 months, the Small-Cap Star has gained more than 80%, making it one of the top performing small cap stocks. Despite the significant gains, Wireless Telecom has further upside potential as the company is expected to benefit from implementation of LTE and DAS.
Based in Paramus, New Jersey, Wireless Telecom Group is a designer and manufacturer of radio frequency (RF) and microwave-based products for wireless and advanced communications industries. The company markets its products and services globally under the Boonton, Microlab and Noisecom brands. It operates through two segments; network solutions and test and measurement.
WTT's Strong Performance in 2013
Wireless Telecom Group registered strong performance in 2013. In the fourth quarter of 2013, the company reported net sales of $9.532 million, up from $8.22 million reported for the same period in in the previous year. For the full year 2013, the company’s net sales were $33.83 million, compared to $29.60 million reported in 2012.
In 2013, one customer accounted for 11% of the company’s total consolidated sales. In terms of geography, the Americas was the biggest contributor to the company’s consolidated, accounting for 79% of the total. Europe, Middle East and Africa accounted for 13% of the company’s total consolidated sales, while Asia Pacific accounted for 8% of the total sales.
During 2013, the company achieved strong revenue growth in its Network Solutions segment, driven by its strong position in the North American DAS market. Indeed, the company is benefiting immensely from the growth in DAS market, which is especially doing well in North America.
According to Paul Genova, CEO of Wireless Telecom Group, the primary driver of the company’s growth is the implementation of LTE and DAS to meet increasing users’ demand for bandwidth that outpaces existing supply. Genova believes that the company’s Network Solutions segment to continue take advantage of this market.
Growth in the Network Solutions segment should also help Wireless Telecom Group weakness in its Test and Measurement segment. In 2013, the segment showed softness mainly due to the U.S. government’s sequester. However, CEO Genova noted that the company recently received a large order of $1.1 million from the FAA, which is encouraging. The order is expected to be fulfilled in 2014.
At the end of 2013, Wireless Telecom’s consolidated of firm orders shippable in the next twelve months was around $3.2 million, compared to $2.2 million at the end of 2012.
WTT's Stock Repurchase Highlights Confidence
In April this year, Wireless Telecom announced that it repurchased 4,815,110 shares of its common stock from Investcorp Technology Ventures L.P. for a purchase price of $2 per share. Genova noted that the repurchase represents an attractive use of the company’s capital and reflects the company’s commitment to the enhancement of long-term shareholder value.
How Much Upside Does Wireless Technology Group Have?
Wireless Telecom shares have been among the best performers in the small cap space this year, gaining almost 30%. The small cap stock has in fact continued its excellent run from 2013, when it gained more than 78%. Despite the substantial gains in the past year and a half, there is further upside potential in shares of Wireless Telecom.
Wireless Telecom has strong fundamentals and the company is expected to continue to benefit from implementation of DAS and LTE. Indeed, these will be the main driving factors behind the expected gains in Wireless Telecom shares.