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Technology Stocks : Digital Ally Inc. - DGLY
DGLY 1.610-0.6%3:59 PM EST
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From: David Alan Cook4/22/2009 9:36:51 AM
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The stimulus grant provides DGLY with an excellent opportunity to grow revenues and earnings in the 2nd qtr and beyond. This stimulus grant is over 5 times the prior market's annual revenue opportunity. My take is:

1. DGLY has a consistent U.S. customer base that has been growing. In the last qtr, with only one product contribution (99% of revenues) and no international sales, the company reported revenue of ~ $6.7M.
2. The company reported a loss of .04 because the Company incurred substantial litigation expenses and higher-than-normal product development and engineering expenses in the fourth quarter of 2008.
3. The company was successful in their litigation and introduced several new products which hopefully will contribute to increased sales in the coming qtrs.
4. One of its products - DVM-750 - has already starting shipping against a $2M backlog of orders that the company received prior to the product being available. They also received their first state contract with 3 year options that could total over $4M in the next 3 years.

My reason for optimism is: Growing domestic (US) market opportunity + new product introductions + international growth opportunities provides a favorable risk reward potential for a company trading below $2 with no debt.

What we need to see imo:

1. Increased acceptance of the new products ie contract announcements / press statements commenting on backlog and/or demand
2. Signs that the company's grant coordinator is translating requests for information into contracts/increased orders
3. Results from efforts to market products with new distributors in both the Middle East and Europe

What I would like to see:

1. More insider buying and/or company buyback of shares
2. Better engagement from IR with investor outreach efforts
3. Greater participation in investor conferences etc
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