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Niche Technology Stocks: Audio Innovators (LOGI, HRAL, DBL, SONO)

Over the past year, five years, decade, and maybe more, the best performing space in the market is clear: technology innovators. The pandemic has driven increasing focus and demand for home technology systems that rely on human interface with information, which drives core growth in both audio and video technology.

Stocks in the audio technology space are often overlooked but have been performing well and may be lined up for further dramatic growth as a new round of government stimulus checks get set to roll out, providing liquidity for more technology consumer product consumption.

As such, we look at a few of the more interesting stocks in the audio technology space, including: Logitech International SA (NASDAQ:LOGI), Hear AtLast Holdings, Inc. (OTCMKTS:HRAL), Dolby Laboratories, Inc. (NYSE:DLB), and Sonos Inc (NASDAQ:SONO).

 

Logitech International SA (NASDAQ:LOGI) bills itself as a company that designs, manufactures, and markets products that helps people connect to digital and cloud experiences. The company offers pointing devices, such as wireless mouse and trackball; corded and cordless keyboards, living room keyboards, and keyboard-and-mouse combinations; PC webcams; and keyboards for tablets and smartphones, as well as other accessories for mobile devices.

It also provides keyboards, mice, headsets, and simulation products, such as steering wheels and flight sticks for gamers; video conferencing products, and controllers for video conferencing room solutions; portable wireless Bluetooth and Wi-Fi speakers, PC speakers, PC headsets, in-ear headphones, and wireless audio wearables; home entertainment controllers for smart home devices comprising lighting, thermostats and door locks, and home security cameras.

Logitech International SA (NASDAQ:LOGI) just announced that the company has been named for the first time to the Dow Jones Sustainability Index (DJSI) Europe, in recognition of its commitment to sustainable business practices.

“We are honored to be included on the Dow Jones Sustainability Index Europe,” said Bracken Darrell, President and CEO Logitech. “Our inclusion reflects our commitment to sustainability, and while we have made progress, we have only just begun to hit our stride in designing our products and our organization to protect the earth. We recognize that our business growth does not come without an environmental impact and pledge to use our resources and leadership to make a positive and sustainable impact.”

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 3% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 12% in that time on strong overall action.

Logitech International SA (NASDAQ:LOGI) generated sales of $1.2B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 51.6% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($842.7M against $1.1B, respectively).

 

Hear AtLast Holdings Inc (OTCMKTS:HRAL) bills itself as a developer of leading edge audio technology for use in listening devices for music and other applications.

HRAL most recently announced its long-anticipated integration of its 2019 acquisition, Crystal Clear Audio, Inc. According to its most recent release, Crystal Clear Audio was acquired in late 2019 by HearAtLast Holdings as a wholly owned subsidiary in an all-stock transaction and the management worked diligently through this difficult year to bring the first products to market.

Hear AtLast Holdings, Inc. (OTCMKTS:HRAL) has also teamed up with some prominent entertainers and sports stars and collaborated on limited-edition releases, including major brand ambassadors now on board such as Dwayne De Rosario, Claudio “THE MATRIX” Marrero, and Platinum Blonde.

The company has also made strong progress during the pandemic by bringing in new manufacturing relationships and developing new features to be monetized as the operational environment normalizes this year.

The context for the stock right now is a bid, with shares acting well over the past five days, up about 45% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 9% in that time on strong overall action.

Hear AtLast Holdings, Inc. (OTCMKTS:HRAL) is looking forward to far more significant operations in 2021 than we have seen from the stock during the recent past because it has now fully on-boarded its primary operational asset acquired in 2019. The company also noted in its release that it is set to launch first new product in sound tech space this month, which could drive further excitement in this more speculative name.

 

Sonos Inc (NASDAQ:SONO) designs, develops, manufactures, and sells multi-room audio products primarily for use in private residences in the United States and internationally. It offers wireless speakers, home theater speakers, and components.

The company offers its products through third-party retail stores and e-commerce retailers, as well as through its sonos.com Website.

Sonos Inc (NASDAQ:SONO) just announced a multi-year licensing deal to cover the entire range of Legrand’s NUVO multi-room wireless audio products. As part of this agreement, Legrand will pay to license Sonos’ patents for all such audio products.

“Sonos innovation created multi-room wireless audio – the technologies we invented enable many of today’s listening experiences and we continue to innovate to enable the experiences of tomorrow,” said Eddie Lazarus, Chief Legal Officer. “We believe in a fair marketplace where companies compete on a level playing field and contribute with their own innovations and experiences. We’re pleased to see more companies such as Legrand recognizing the strength and value of our IP and providing appropriate compensation.”

And the stock has been acting well over recent days, up something like 5% in that time. Shares of the stock have powered higher over the past month, rallying roughly 12% in that time on strong overall action.

Sonos Inc (NASDAQ:SONO) managed to rope in revenues totaling $339.8M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 15.5%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($407.3M against $393M).

 

Dolby Laboratories Inc (NYSE:DLB) bills itself as a company that creates audio and imaging technologies that transform entertainment and communications at the cinema, at home, at work, and on mobile devices.

The company develops and licenses its audio technologies, such as AAC & HE-AAC, a digital audio codec solution used for a range of media applications.; AVC, a digital video codec with high bandwidth efficiency used in media devices; Dolby AC-4, an audio coding technology that delivers new audio experiences to a range of playback devices; and Dolby Atmos technology for cinema and a range of media devices.

Dolby Laboratories Inc (NYSE:DLB) recently released findings from a new global survey illustrating a significant shift in consumer entertainment behavior. Findings include a strong intent from consumers to pay more for enhanced picture or sound quality, new ways of interacting with friends and family while enjoying entertainment, and insights that people are investing more in their home entertainment. From this survey, it remains clear that consumers continue to want, demand, and are willing to spend more on enhanced experiences, now more than ever.

“Despite all of the challenges of this past year, this study has illustrated the power of entertainment in bringing us together with those that are most important to us,” said John Couling, SVP Commercial Partnerships at Dolby Laboratories. “We take great pride in creating more immersive experiences through our technologies and see the significant growth of Dolby Vision and Dolby Atmos as proof that consumers are seeking these experiences as well.”

It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things.

Dolby Laboratories Inc (NYSE:DLB) generated sales of $271.2M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 9.8% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($1.1B against $267.1M).

Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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