There has been no shortage of market pundits trying to pick which firms will benefit most from the $850 Billion + stimulus package that is winding its way through Congress. It looks like $30 Billion will be spent repairing roads, bridges and sewage treatment plants on “shovel ready” projects that will put people to work quickly. We do not know how this money will impact the economy, but it seems a safe bet to say that increased highway work could lead to more traffic.
So take a look around the next time you are stuck in traffic – chances are you seeing the products of several microcap companies that stand to benefit from this slice of the stimulus pie. Chicago-based Quixote Corp. (Nasdaq:QUIX, http://www.quixotecorp.com) sells traffic cones, crash cushions and barriers. Its shares closed yesterday at $3.48 with volume of about 30,000, down from a 52-week high of $18.25, for a current market cap of $32 million, less than half of Quixote’s revenues, and possibly an indicator that people have not yet realized that there may be a bailout bonus in their future. Quixote is also a leading domestic provider of highway advisory radio (HAR) systems and Intelligent Transportation Systems. Its products go hand-in-hand with highway construction work.
Plano, TX-based Viewcast (EBB:VCST, http://www.viewcast.com/“>), a provider of streaming video technology, is well positioned as a key component for the traffic monitoring market — especially when travelers need to get traffic updates on their cellphones or other mobile devices in real time. Viewcast has a market cap of $12.7 million and a current price of $0.39, a little more than half its 52-week high, with average volume of just under 25,000 shares per day. We are told that local-news stations are finding that this service helps draw in hard-to-reach viewers, just as “traffic updates on the 1s” keep people tuned in to all-news radio. Local governments can use Viewcast-type feeds to monitor progress and bottlenecks at road improvement projects.
St Paul, MN-based Image Sensing Systems Inc (Nasdaq:ISNS, http://www.imagesensing.com/) offers products that measure traffic speed and volumes to monitor current congestion levels and forecast journey times. ISNS has a market cap of just over $26 million and a current stock price of $6.69, down from a 52-week high of $16.50, but with low average trading volume. Traffic management systems use this traffic data in real time to govern traffic flows and to monitor road capacity usage for long-term planning.
Last but not least is Fairfax, VA-based ICF International (Nasdaq:ICFI, http://www.icfi.com). It does not play in the traffic space specifically. It is a management services firm. But earlier this month it won awards to help the Federal Highway Department to mitigate the loss of wetlands during highway expansion, so it potentially combines the attractions of greentech with those of bailout bonus eligibility. ICFI currently has a market cap of $352 million and a stock price of $23.68, down from a 52-week high of $28.17. It has an average trading volume of 134,000+ shares.