Image Sensing Systems (ISNS) Stock Soars on High Volume

NEW YORK (TheStreet) -- Image Sensing Systems  (ISNS) soared Tuesday alongside Digital Ally  (DGLY) and Vicon Industries  (VII) as the civil unrest in Ferguson, Mo. continues.

Image Sensing Systems makes develops image processing products for advanced traffic management systems and traffic data collection. Vicon makes security cameras, while Digital Ally makes wearable cameras for police. Digital Ally stock has been surging for days as the tension in Ferguson has led to increased interest in its products.

Image Sensing Systems was up 43.76% to $3.42 at 11:48 a.m. More than 1.9 million shares changed hands, which eclipsed the average volume of 33,967.

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Separately, TheStreet Ratings team rates IMAGE SENSING SYSTEMS INC as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate IMAGE SENSING SYSTEMS INC (ISNS) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, IMAGE SENSING SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ISNS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 68.58%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • ISNS, with its decline in revenue, underperformed when compared the industry average of 8.8%. Since the same quarter one year prior, revenues fell by 20.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • IMAGE SENSING SYSTEMS INC has improved earnings per share by 11.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, IMAGE SENSING SYSTEMS INC reported poor results of -$3.21 versus -$0.69 in the prior year. This year, the market expects an improvement in earnings (-$1.12 versus -$3.21).
  • The gross profit margin for IMAGE SENSING SYSTEMS INC is currently very high, coming in at 74.23%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -25.81% is in-line with the industry average.
  • You can view the full analysis from the report here: ISNS Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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