Why Magal Security Systems (MAGS) Stock Is Gaining Today

NEW YORK (TheStreet) -- Magal Security Systems (MAGS) was gaining 21.22% to $5.37 Wednesday after announcing its new perimeter security surveillance robot.

The robot, called the RoboGuard, travels on a monorail while constantly patrolling a secured perimeter. The RoboGuard can conduct regular inspections of a fence line to maintain the integrity of a perimeter, according to Magal Security Systems.

A complete RoboGuard system includes several autonomous robots that each cover up to 1 km, and one recharging docking station for every two robots.

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Magal Security Systems will show off the RoboGuard surveillance robot at the ASIS USA show in Atlanta on September 29.

TheStreet Ratings team rates MAGAL SECURITY SYSTEMS as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate MAGAL SECURITY SYSTEMS (MAGS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."

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

  • MAGS's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MAGS has a quick ratio of 2.35, which demonstrates the ability of the company to cover short-term liquidity needs.
  • MAGS, with its decline in revenue, underperformed when compared the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 7.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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, MAGAL SECURITY SYSTEMS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for MAGAL SECURITY SYSTEMS is currently lower than what is desirable, coming in at 32.68%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -15.78% is significantly below that of the industry average.
  • You can view the full analysis from the report here: MAGS Ratings Report

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