Melhado, Flynn & Associates, whichrecently initiated coverage of Digital Angel [AMEX: DOC], is recommending that investors buy the company’s stock. Digital Angel (St. Paul, Minn.) supplies devices that enable people, pets and valuables to be tracked using GPS satellites.
Analyst David H. Talbot predicts that Digital Angel’s stock price will recover in the near future to a more normal range of $3 to$4 per share from its current $1.70 per share. He expects the stock price to surge to the $8 to $10 per share range within the next 12 months based on projected earnings growth from the base business–animal tracking devices using implantable microchips. Talbot projects positive cash flow by the second quarter, a small profit this year, and significant earnings growth thereafter, but his estimates do not take into account potential demand for new GPS products available later this year.
