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There's a good chance you've used one of
NCR's (NCR - Get Report) products before, even if you can't remember it. NCR designs automated kiosks like ATMs, point of sale terminals, and self check-in kiosks for airlines, focusing its efforts on helping customers interact with companies with minimal human interaction. The firm's leading market position in the businesses it operates in provides a nice cushion for investors right now.
NCR has some big tailwinds pushing at its back. One of them is banks' desire to integrate newer technology (such as check processing and envelope-free cash deposits) into their ATMs. It's more than just appeasing customer desires. Adding those features dramatically cuts back on the labor costs that banks formerly needed to process those transactions, so the cost-benefit analysis for paying up for newer units is very attractive.
As the world's installed base of ATMs get upgrades, NCR should get a huge chunk of that business. The firm's innovation has been another important growth driver. By developing products like self-check-out stations at grocery stores, the firm has introduced its customers to products that they didn't even know they wanted.
And the decreased labor costs justify the hefty price tag of installing check-out stations, airline kiosks, and other novel automated systems. Around half of NCR's debt load is covered by cash right now, a fact that should give investors comfort over the firm's ability to handle any unexpected economic speed bumps. Significant overseas sales also creates some impressive opportunities as emerging market countries quickly grow their installed bases of ATMs and other self-serve systems.
To see all of this week's Rocket Stocks in action, check out
the Rocket Stocks portfolio at Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.