As we survey the current market, the tech sector has emerged as a promising investment arena. Following a corrective adjustment in valuation multiples and a slew of layoffs in recent months, tech stocks, specifically diversified technology companies, appear to be advantageous. In today’s post, we’ll focus on one such undervalued player, Cemtrex Inc. (NASDAQ:CETX), a diversified tech firm with a unique business model and varied product lines.
What Does Cemtrex Do?
Cemtrex, a multinational tech company based in Brooklyn, operates two primary business lines – Advanced Technologies and Advanced Industrial Services (AIS). Vicon Industries, a subsidiary, develops and markets SmartDesk-branded IoT products and smart devices across a multitude of industries. From mobile and web to augmented and virtual reality, Vicon delivers comprehensive solutions for business and industrial applications. Its offerings span analytics-based recognition systems to cameras and servers, serving diverse sectors such as educational institutions, government offices, and federal prisons.
The AIS division offers turnkey solutions and services including rigging, millwrighting, and equipment construction. Serving various industries, from automotive to packaging, AIS is known for its high-precision equipment installation and maintenance services for the manufacturing sectors.
Vicon’s Comprehensive Product Line
Vicon’s product line is broad and robust, offering motion capture and video management systems. Their flagship product, the Valerus VMS, provides advanced live monitoring and high-performance video recording. On the other hand, the VAX Access Control enables centralized control and management of secure areas in any size buildings. The product portfolio is completed by a range of cameras and motion capture accessories.
The SmartDesk Upside
The SmartDesk by Cemtrex has revolutionized the office desk with its all-in-one workstation. It has paved the way for increased convenience and productivity, with features such as a 72-inch multi-touch display, integrated document scanner, wireless smartphone charging, and a powerful PC. The latest model, SmartDesk Connect, caters to the increasing trend of remote working.
Cemtrex’s Advanced Industrial Services (AIS)
The AIS subsidiary provides high-tech solutions for various industrial sectors, including aerospace, defence, automotive, oil, and gas. With services ranging from minor projects to sustaining capital, turnarounds, and maintenance, AIS assists clients in optimizing asset utilization and reliability, increasing production, and reducing costs.
Market Size & Expected Growth
Given the promising market trends, with the global workplace transformation market and the global video surveillance market expected to reach $70 billion and $144.85 billion respectively by 2030, Cemtrex is well-positioned to capitalize on these growing opportunities.
Final Thoughts
Led by a strong management team, Cemtrex’s success is grounded in experience, skill diversity, and industry expertise. However, as a small-cap stock, it’s susceptible to market volatility and inconsistent financial performance. In addition, competition and regulatory changes present potential challenges.
Cemtrex appears to be a promising investment, especially for small-cap investors. With a low Price-to-Sales ratio and an Enterprise Value-to-Revenue multiple under 0.5x, the firm’s potential for multiples expansion is significant. If you’re an investor seeking to diversify your portfolio and capitalize on a company with a robust foundation, Cemtrex is certainly one to watch.
