order to optimize their organization’s productivity. More specifically, the auto insurance industry’s use of vehicle sensors to effectively manage usage-based policy discounts is a large, potentially rich source of profits for CalAmp Corp. (NASDAQ:CAMP). In addition, the company should be able to increase its market share in international markets, 18% of FY2013 sales, especially in high-risk areas that require constant monitoring of high-value infrastructure assets.
Despite sales growth that pales in comparison to the levels of a decade ago, Cisco Systems, Inc. (NASDAQ:CSCO) is still the king of networking and has significantly streamlined its business over the past two years. The company’s goal is to generate efficiency gains for its customers through network-focused products, including unified wireless networks and collaboration tools. Cisco Systems, Inc. (NASDAQ:CSCO) has also eschewed the go-it-along strategy, partnering with fellow tech industry titan EMC Corporation (NYSE:EMC) in a joint venture that will pursue higher sales in the all-important data center arena.
In its latest fiscal year, Cisco Systems, Inc. (NASDAQ:CSCO) reported solid improvement in its financial results, with increases in its revenues and operating income of 6.6% and 31.2%, respectively, compared to the prior year. The company’s sales growth benefited from greater customer adoption of its wireless network products, as well as gains from the current upgrade cycle in its security product portfolio. More importantly, Cisco Systems, Inc. (NASDAQ:CSCO)’s profitability was enhanced by its re-focus on a limited set of core areas, like wireless networking and collaboration software, which has improved its operating cash flow and provided increased funds for improving shareholder value.
While the days of hyper-growth are likely over for the networking equipment industry, there are select pockets of growth that are focused on the security and enterprise asset management areas. With private equity moving into the sector, investors need to be on the lookout for growth and value stories. As such, CalAmp Corp. (NASDAQ:CAMP) and Cisco Systems, Inc. (NASDAQ:CSCO) should be on investors’ watchlists.
Robert Hanley owns shares of CalAmp. The Motley Fool recommends Cisco Systems. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Time to Look at the Network Equipment Space originally appeared on Fool.com is written by Robert Hanley.
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