Steven Dyer, an analyst with Craig-Hallum Capital Group, has totaled it up. Between new stadiums and upgrades, he sees 112 projects happening in the next three years. Consider that the Kauffman Stadium deal alone was worth $10 million to Daktronics, and business looks bright. Both the New York Yankees and the New York Mets are erecting new stadiums and those deals are expected to fetch $20 million each. Meanwhile, the Arizona Diamondbacks intend to have a new board worth $10 million to $12 million by opening day 2008. Longer term, the sports side of the business isn't even the exciting high-growth part of the story. "Billboards are kind of the sexy part of the stock," says Dyer, who rates shares at Strong Buy. (Analysts' average call sits between Buy and Hold, according to Thomson Financial.) "They've grown their digital billboard business 100% for two consecutive years. There's almost half a million billboards in the country and only 600 or 700 thus far have been converted to digital." Lamar Advertising (LAMR: 53.83, +0.68, +1.27%) and Clear Channel Outdoor (CCO: 24.00, -0.59, -2.39%) control roughly 300,000 of the nation's billboards. Alpert believes Daktronics now has as much as three-quarters of the Lamar business and perhaps 70% at Clear Channel. Needham analyst James Ricchiuti, who rates shares a Buy, regards the company as one of the strongest organic growth stories he covers. "We expect bookings to remain strong over the next several quarters in Daktronics' core sports market and commercial business, notably digital billboards," the analyst wrote last month. http://www.smartmoney.com/Techsmart/index.cfm?story=20071107&afl=yahoo
Walter,Alpert believes Daktronics now has as much as three-quarters of the Lamar business and perhaps 70% at Clear Channel. LSI Industries is making inroads into Clear Channel with its new billboard. I also expect Cree/COTCO to compete as well. Swoboda was asked a question at the ASM about why didn't Daktronic use more Cree chips. His reponse was that Daktronics started with Nichia LEDs and produces LED displays for the US market while COTCO uses Cree chips and produces displays for the Chinese market and that the two haven't competed directly. Now Cree plans to market COTCO products worldwide.There'll be plenty of competition for Daktronics.Jim
Jim,I was not impressed with LSI's earnings statement. It sounds to me like they are late to the game in large size video boards, struggling with new products, and things are not all that ducky with their new Montreal division. Maybe a couple of quarters from now, if all goes well, things might start lookng up. In the meantime, Daktronics is hitting on all cylinders.Cotco? Compete in the US with Daktronics? There are a lot bigger / better players competing here already than Cotco. Cotco would do best to focus on China in the billboard space. Cotco may be competitive worldwide in other, smaller products (components), however.imhowj
Walter,It sounds to me like they (LSI Industries) are late to the game in large size video boards, struggling with new products, and things are not all that ducky with their new Montreal division.I wouldn't say that. It's very early in the billboard business and they have made a few sales to Clear Channel. I would say that the billboard business is largely untapped and that LYTS is in it at the beginning.Cotco would do best to focus on China in the billboard space. Cotco may be competitive worldwide in other, smaller products (components), however.I don't know if Cree will actually compete in the billboard space, though Swoboda gave that impression. The reason is that, to my knowledge, the COTCO products go into games and are indoor products. There's a fair amount of work needed to make the product an exterior product. I think Cree will ultimately compete with Daktronix, but maybe not in the shortrun.The size doesn't really matter. Cree has a COTCO display in its auditorium that is comparable in size to a billboard (48'X12'). There's another one in the lobby that is used as a 50"-60" TV. I got up close enough to look at the LEDs. It's just an array of RGB LEDs spaced about 1/4"-1/2" a part. The LEDs are not close enough that you have to worry about heat from an adjacent LEDs.Quite a rally be Cree into the close on an awful day at the market!Jim
http://seekingalpha.com/article/53611-daktronics-at-perfect-buying-spot?source=yahooDaktronics at Perfect Buying Spotposted on: November 09, 2007 | about stocks: DAKT An incredible opportunity is presented to us amid the recent strong market corrections and panic sell off across every sector. But don’t sell everything. Start buying selectively...<snip>Imagine the possibilities here: as per Thomson Financial, there are a half a million billboards in the country and only 600 have been converted to digital so far. Only 600 out of 500,000. Now that gives you something to talk about.Jim
Walter,I meant to add this this is an example, perhaps, of where LEDs expands the market for lighting. Bills boards are lit up at night, but I'm sure those lights are less expensive than the LEDs that go into a digital billboard, even after adjusting for the different life cycles.Jim
I hold some DAKT stock. I purchased it after a 30% drop, then it zipped up - now its zipped down again. The last time it took a dive the company was having trouble filling orders. They couldn't keep up with the demand and customers were looking elsewhere to get their displays installed on schedule. I bought stock because I thought they'd figure out how to crank out more displays. I don't know if they are still severely back-ordered. Having 500,000 potential customers sounds good, but if you can't turn out the product they won't be your customers.
Wow. a 30% drop in 1 day!I listened to the CC, and what hurt them was their guidance for next Q. Some big scoreboard deals have been pushed out, 1 football stadium deal has been lost. Also, there is some softness in the "commercial" market. They predict a strong january quarter. We shall see.
Walter,... 1 football stadium deal has been lost. Do you know who won the order?Jim
Jim,They would not say on the CC.The decision was made several weeks ago, but not yet announced.wj
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