CalAmp Corp. Crashed and Burned in April. What's Next?

Technology stocks have not exactly prospered in recent weeks. The tech-heavy Nasdaq Composite (NASDAQINDEX: ^IXIC  ) index has dropped more than 5% in the last two months while the S&P 500 market tracker traded slightly up:

^IXIC Chart

^IXIC data by YCharts.

CalAmp (NASDAQ: CAMP  )  has been one of the Nasdaq's worst performers in this period. What happened to the high-flying tech darling, and where is CalAmp going next?

The backstory
CalAmp came into 2014 on a full head of steam. The company uses wireless connections to collect and process data from all sorts of machines, making CalAmp a pioneer in the Internet of Things field. Where machines talk to other machines without any meddling humans in the middle, CalAmp wants to manage the communications.

The stock more than tripled in 12 months before peaking in early March. From there's it's been a 49% downhill ride for CalAmp investors:

^IXIC Chart

^IXIC data by YCharts.

The dramatic 10-month rise is easy to understand. CalAmp is an early leader in a red-hot market, and you know what they say about early birds.

But it's not good enough to arrive early to the party. You have to execute as well, and CalAmp investors started losing patience with the company's execution in the spring. The situation came to a head in April, when the company reported somewhat disappointing sales and earnings and issued soft next-quarter guidance.

So where does that leave CalAmp investors today? I think FBR Capital analyst Scott Thompson nailed it in a late March research note: "While we still think the opportunity is substantial in the long run, we adjust our expectations for a more conservative 2014."

That conservative price target still looks out of place at $29 per share, but the sentiment is about right. CalAmp is an attractive stock for two classes of investors right now: opportunistic day traders who love big volatility, and patient long-term owners who don't mind suspension-wrecking speed bumps as long as the final destination looks sunny.

Image source: CalAmp.

What's next?
CalAmp has a lot going for it, including machine-to-machine communications contracts with several top-shelf customers. It's also easy to get excited about CalAmp's skyrocketing revenue and generally positive cash flow.

All things considered, I wouldn't back up the truck to load my life savings into this stock, given the intense competition that CalAmp is up against. But at this sudden discount, it's an interesting company for further research or a small, speculative position.

I can't promise market-stomping returns from here, but CalAmp is looking at enough opportunity in the Internet of Things market to make me excited about the roller-coaster ride ahead. At the very least, CalAmp deserves a thumbs-up rating in my CAPS portfolio today.

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Read/Post Comments (39) | Recommend This Article (23)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 07, 2014, at 11:55 AM, simplemts wrote:

    Isn't this the stock of 2014 that was recommended by Motley Fool's PAID service @ a price above $30??? Now it is 50% off your recommended price and you say "you wouldn't back the truck up"?

  • Report this Comment On May 07, 2014, at 12:28 PM, jra3h9 wrote:

    Everyone would be well served investing in ETFs opposed to listening to TMF advise.

  • Report this Comment On May 07, 2014, at 1:18 PM, nwatgame wrote:

    As a MF client I am disappointed that I had to listen to a very long unnecessary video of RIP Internet only to find that I must pay additionally for the information there in. What is the name of the company referred to in that video. In the future please respect our time and reduce the length of your video's and get to the point in a very timely manner.

  • Report this Comment On May 07, 2014, at 1:51 PM, xavierbaars wrote:

    Even worse, all their recommendations are down a lot!

    Wholefoods

    Wesport

    Sierra Wireless

    Mercado Libre

    Scribs Networks

    Calamp

    List goes on and on. One thing is for sure, never listen to those video's and the agressive sales pitches. I am not sure how MF monetizes them, but for sure it was not in favour of their members.

  • Report this Comment On May 07, 2014, at 2:02 PM, Rickinva54 wrote:

    I have taken a pummeling on this, as I bit on the stock of 2014 schtick. But I am resolved this is a 5 year stock, not a one year stock. CEO just gave an update and briefing you can listen to on the Calamp website with the latest investor's briefing packet. Worth a listen. I think the future is still bright but may be 2 years before we are in the 30s on this stock. Clearly the shorts are just hammering this stock to the downside.

  • Report this Comment On May 07, 2014, at 2:43 PM, hdotis71 wrote:

    What happened to the "2014 Tech Stock of the Year"? I didn't bet heavy on this, but still, one would expect something slightly better. Serious disappointment from MF. The MF investment head was selling the paint off the building for this stock, now the guidance is wait it out?

    Disappointing to say the VERY least.

  • Report this Comment On May 07, 2014, at 2:54 PM, hiro wrote:

    MF has well demonstrated that their real expertise is in marketing...not the stock mkt.. Old adage in marketing is to sell the sizzle...they do a superb job with selling the sizzle with e their compelling stories. Thats what their newsletters a re..These companies are great stories,, but we didn't buy this service to read interesting bedtime stories. They say if you"...THROUGH ENOUGH MUD ON THE WALL, SOMETHING IS BOUND TO STICK..ADD THE FOLLOWING TO YOUR LIST OF LOSERS....KMX, URBN UBNT. .. Another service I've subscribed to recommended SWKS which I bought... and its doing great in contrast to CAMP & UBNT I also bounght GILD recently . Its doing great

  • Report this Comment On May 07, 2014, at 3:38 PM, TheTinMan wrote:

    With recommendations like CAMP, the Fools make us all long-term investors...not to mention TCS, WFM, MTH...

  • Report this Comment On May 07, 2014, at 4:43 PM, johnatkinsond wrote:

    Hey Guy's I am right there with you. I bought CAMP after becoming a Fool Subscriber two weeks ago. Now I feel like a Fool after earnings. Lucky for me I was able to cancel my subscription. Maybe the refund will help me pay off the margin call. LOL

  • Report this Comment On May 07, 2014, at 5:11 PM, mariothegem wrote:

    The big mistake made by MF was to state Stock of the Year ! You should have said Stock for the next 5 Five years and maybe investors such as myself would not have been so disappointed. MF made it sound like it was time to get in now before the ship sailed away...Unfortunately the ship hit an iceberg along the way and now those of us who loaded up are paying the price...iT WAS PROBABLY YOUR WORST PICK OF THE YEAR...and quite frankly the MF was dead wrong ...I am still holding half the position and hoping we get a rebound though...please do keep us posted but be a little more humble when making predictions.

  • Report this Comment On May 07, 2014, at 7:27 PM, mgsdfool wrote:

    Extremely disappointed as well. When I emailed customer support about why there was no commentary or guidance from TMF regarding their 2014 stock of the year, the response was, "Stocks 2014 is a one time publication with no follow-up. Please feel free to post all your investing questions on the stock advisor members only discussion boards."

    I did invest in CAMP and I feel nauseous about it now. Did anyone see "10% promise" commentary?

  • Report this Comment On May 07, 2014, at 10:18 PM, csw wrote:

    I am on the same boat. Feel like a fool.

  • Report this Comment On May 08, 2014, at 1:03 AM, midl10 wrote:

    The bad news for us is if it goes down 50% it has to come back 100% for us to to be even. I am in for the long term holding most for 5years.

  • Report this Comment On May 08, 2014, at 1:46 AM, duhaus wrote:

    Guess I'll chime in. I'm down a bunch on CAMP also like most of you but I can't bring myself to hold TMF or anyone else to blame for it. YES they did tout it as a great stock and looking at the fundamentals it still appears to be. That's the way the market rolls along, you can't foresee and predict everything and even good companies have hiccups (missed earnings and soft guidance) Combine this with the market's sentiment regarding the sector right now and the confluence of headwinds has manifested a perfect storm that none of us like but that can happen and unfortunately did. We all make our own decisions and have to stand by them. If you follow due diligence and determine it's a good stock and fits your portfolio then there's noone to blame (or take credit) for the choice but the person in the mirror. Ditto if you invest in a stock blindly based only on a recommendation, no matter how enthusiastic it is. This is not a happy time for this stock but it should pass. Investing has it's own time frame and it's usually slower than we'd like. Just my 2 cents. Good luck to all on CAMP, hopefully we'll all be smiling together sooner than we think.

  • Report this Comment On May 08, 2014, at 3:03 PM, Lz wrote:

    I'm down quite a bit on this stock - but what's interesting is that Fleetmatics FLTX is up 2% today and recommended as a buy from bank of America as an IOT - internet of things, but calamp is the supplier for Fleetmatics and many other IOT companies, Calamp has no bank recommendation, is down another 5% today, and also has similar products that are sold world wide - makes no sense to me. Market is miss stepping with this one - just my opinion.

  • Report this Comment On May 08, 2014, at 4:52 PM, cgbturkey wrote:

    I agree with all. They need to stop the 2 hour video that you have to watch to find out anything!

    I don't have 2 hours. It's just rambling non-sense

  • Report this Comment On May 08, 2014, at 5:37 PM, olehounddog wrote:

    I bought CAMP ON 4-14-14. IT WAS SOMETHING THAT WAS PROMOTED AS A JUMP ON QUICK. We all know how it has dropped like a rock. on May 8th it closed at $15.24. I paid $24.74. That is a bit too volital for me. This service must be for those investors with deeper pockets. I will be asking for a refund. My paper stock loss is $1900.00.

  • Report this Comment On May 08, 2014, at 6:25 PM, tjpliss wrote:

    i paid 35.camp ,13 amrc 41.tcs lfus 99. this sucks my retirement ?

  • Report this Comment On May 08, 2014, at 6:36 PM, jiminland wrote:

    http://screencast.com/t/ihbJ1jNj8I1

    Yikes, if the rally and collapse of 1996-1997, and then 2000-2001 is any example, it would appear that CAMP could give it all up again !!

    No position held.

    Jim

  • Report this Comment On May 08, 2014, at 6:41 PM, jiminland wrote:

    Some positive divergence in the MACD histogram.

    Could get some technical help here soon.

    http://screencast.com/t/l3C9Ql8l

  • Report this Comment On May 08, 2014, at 7:36 PM, Lz wrote:

    IOT- internet of things- is going to be HUGE and very real. Calamp is THE supplier (of or for) Fleetmatics, Himex, RAC, Navman, Numerex, Telogis, Graco, Directed, Tag N Go. If you search for these sites you will see some applications of this technology, which looks really cool - such as monitoring your kids driving behavior and potentially getting insurance discounts, They have patents that they license as well to trackn and drive ok. Besides being a supplier they also have their own large customer base worldwide with a broad portfolio - vehicle/ trailer/ asset trackers, diagnostic devices, vehicle gateways, routers, mobile terminals, Paas & Saas cloud commuting - solutions for transportation, lenders, energy, government, and automotive, They have patents on collecting info from vehicle devices, virtual ignition detection, and others. They also have 12 new international certifications.

    Motley fool didn't make a mistake in their recommendation. A few larger investors sold when they saw soft guidance for next quarter which made the stock drop a bit and then caused a ripple effect of fear based selling. When I see a report that puts Fleetmatics as a buy for IOT and not mention calamp, which is their key supplier and has its own comparable products, I think that the technology is so new that key investors don't really see the big picture yet. I have doubled up on this stock and hope to get out of some of my other holdings soon to purchase more. Just my opinion.

  • Report this Comment On May 08, 2014, at 7:37 PM, Lz wrote:

    IOT- internet of things- is going to be HUGE and very real. Calamp is THE supplier (of or for) Fleetmatics, Himex, RAC, Navman, Numerex, Telogis, Graco, Directed, Tag N Go. If you search for these sites you will see some applications of this technology, which looks really cool - such as monitoring your kids driving behavior and potentially getting insurance discounts, They have patents that they license as well to trackn and drive ok. Besides being a supplier they also have their own large customer base worldwide with a broad portfolio - vehicle/ trailer/ asset trackers, diagnostic devices, vehicle gateways, routers, mobile terminals, Paas & Saas cloud commuting - solutions for transportation, lenders, energy, government, and automotive, They have patents on collecting info from vehicle devices, virtual ignition detection, and others. They also have 12 new international certifications.

    Motley fool didn't make a mistake in their recommendation. A few larger investors sold when they saw soft guidance for next quarter which made the stock drop a bit and then caused a ripple effect of fear based selling. When I see a report that puts Fleetmatics as a buy for IOT and not mention calamp, which is their key supplier and has its own comparable products, I think that the technology is so new that key investors don't really see the big picture yet. I have doubled up on this stock and hope to get out of some of my other holdings soon to purchase more. Just my opinion.

  • Report this Comment On May 09, 2014, at 4:34 AM, swayzy wrote:

    Most of MF recommendations if not all are down significantly. I invest like a fool but use my head sometimes. Luckily, didnt buy LNKD, WFM, TCS and other "top recommendations" which are down about 30-40 % since recommended by MF for paid subscribers but unfortunately bought some others, CAMP, INVN when recommended which are successfully down 30% as well. I think these stocks are for the long term, so fasten your seat belts and be ready to hold on for 2-5 years.

  • Report this Comment On May 09, 2014, at 6:42 AM, OLDFLAME wrote:

    Wish I had never listened to TMF. What a load of CRAP! Lost my shirt listening to their advise. CAMP is down more than 50%. Imagine NASDAQ having a 20% correction. Bunch of TMF recommendations would be decimated. STAY AWAY!

  • Report this Comment On May 09, 2014, at 10:53 AM, Etlorenceau wrote:

    I bought some Put Spread on CAMP when it became clear that it was becoming a hype stock at 32$ (when it's just a very good stock) as, for years, the large institutions keep on shorting the hype stocks which was clear when watching the Put/Call ratio going up. I had to sell the spread when the stock went below 22$ (my too high lower Put sale in the spread) with a handsome profit. I'm starting to buy a call spread now at 20/30$ strike prices for december and average it down as the fundamentals of CAMP are very satisfying.

    This being said, MU which was competing with CAMP on the way up, didn't get hit by the big sharks (the average option volume was too small for the Put/Call ratio to be significant.

    Checking the seasonality of Healthcare, in the meantime, I went long with calls on PMC and feel very happy about it.

  • Report this Comment On May 09, 2014, at 12:22 PM, notacompletefool wrote:

    I am sure that the Gardiner Boys come up with some great Investment Ideas!! These winning predictions are replayed over and over Ad Nausea um on the MF'S Sales Pitches for the next wonder Stock which Subscribers can access by signing up for a Years worth of STUFF (at a heavily discounted ONE OFF, TOO GOOD TO MISS BLAH BLAH BLAH Practically giving it away price!! It would be really refreshing if just once they were to acknowledge all the Heavily Hyped Stock Picks that have caused those who follow them to incur, sometimes heavy losses!!

  • Report this Comment On May 09, 2014, at 4:37 PM, jiminland wrote:

    Now it's UBNT turn, down 25% today.

    What is going on here?

    CAMP over 50% off

    LQDT over 60 % off

    UBQT 25% off TODAY !!!

    I am disgusted

  • Report this Comment On May 11, 2014, at 10:23 AM, sniperman2323 wrote:

    Don't forget their 'wonderboy' HIMX !!!!!!!!!!

  • Report this Comment On May 11, 2014, at 5:52 PM, amh7209 wrote:

    They wouldn't back up the truck because they made a mistake in the assessment of the stock. They are now changing their tune. I must say, though, that part of the responsibility of stock recommendation, especially the "David" high flyers, is to assess the potential effects the market might have on the stock in the event of missed expectations. This is part and parcel of making a recommendation. I would also say that the MF is not the greatest in providing entrance price points. To recommend a stock like this, which is essentially a speculative stock, and come out strong after the stock is at record highs is not the most incisive analysis for members who are paying thousands of dollars/year for investment advice.

  • Report this Comment On May 12, 2014, at 12:15 PM, JackHoff wrote:

    I have been making money by watching Motley Fools recommendations for the past 2 1/2 to 3 years. I noticed a trend a few years ago. Whatever they say the OPPOSITE happens. So I used this to my advantage. If they recommend a stock I SHORT it. If they give a negative rating to a stock I go long and buy it. It has worked like a charm for me. It works about 85 to 90 % of the time. It's not a perfect system but 90% wins are pretty darn good odds.

    Do the opposite of what the FOOLS recommend and you will make money. Why do you think they are called FOOLS? Because they ARE fools. When it comes to stocks they don't have a clue.

  • Report this Comment On May 12, 2014, at 12:56 PM, EasilyLost wrote:

    I thought it interesting that MF does not hold a position in CAMP (from disclosure at end of this article). I thought they did when SA recommended it earlier?

    While I've seen my position on it take a 45% loss so far for me I think it is still a good stock for long term. I'll probably add some more shares at this price. Not enough that it will hurt me if it tanks completely - but I just don't see it doing that in 3 to 5 years.

  • Report this Comment On May 14, 2014, at 11:39 AM, lilolvintner wrote:

    Only a Fool thinks he can foretell the future. And only a fool pays for his advice. It took me 6 years to forget how bad their advice was, and now I got hung again! I hate it when I do this!!

  • Report this Comment On May 14, 2014, at 1:16 PM, famousstocks wrote:

    If MF recommends a stock, you still must do your homework.

    DDD and CAMP have been recommended at top levels, but a short lock at the chart told me, that the downside potential is huge.

    After the kind of 50% collapse maybe I put some play money on these two soon as I see a nice turnaround chart pattern in the meantime i'm long GLUU and HIMX again.

    Ride the waves, more luck to all.

  • Report this Comment On May 14, 2014, at 1:17 PM, famousstocks wrote:

    look not lock, sorry

  • Report this Comment On May 14, 2014, at 7:46 PM, celuthi wrote:

    One can only cry 'Wolf!' so many times. Anyone else NOT curious about TMF's next super stock recommendation? I suppose the accountability factor is gone when your best advice to a paid member is "If not now, this stock will definitely do well 5 years from now."

    Also, enough with the time consuming, cheese-ball video ads please.

  • Report this Comment On May 14, 2014, at 8:47 PM, BillFromNY wrote:

    If you join MF Rule Breakers or Stock Advisor, in return you are introduced to a new world of stock picking by David Gardner and others that is world class.

    What you do not get for the money is a hand-holding monthly and emergency statement of what to do with the company once you have bought it. There are, however, research articles from your local broker and from Seeking Alpha, and from MF itself that will assist you in making your trading decisions. But it is still your obligation to do the research. If you want MF to do the decision-making for you, your subscription price will be higher.

  • Report this Comment On May 24, 2014, at 8:53 PM, mako9652 wrote:

    these are the list of stock I hold per MF recommendation:

    LQDT, CAMP, SWIR, WFM, SBUX, AAPL, KMX, KMI, AtVI, Clne, WETF, SINA, WPRT TCS

    I sold Coach and Hain for a small profit...and made a few $ trading NFLX

    It is quite discouraging to say the least...but I will give them another year or so to prove me wrong...I do agree that their promotional stuff is getting to me...

  • Report this Comment On May 27, 2014, at 5:19 PM, Canhe wrote:

    Read all the tips you like but the only person accountable for your purchases.. is you.

    I just bought a bunch of calamp today at $18.73.

  • Report this Comment On June 10, 2014, at 10:13 PM, hypedout wrote:

    I have been very disappointed with a number of the MF recommendations over the past several months. InvenSense, DDD, The Container Store (TCS), and CalAmp to name heavily hyped examples. The MF really fell for the hype by Kip, the TCS CEO. I agree with the comments about the lengthy videos that appear to tout investments that apparently are not being based on thorough research; I guess they just have to come up with something each month even if there are not solid candidates. I will be canceling my subscription as I feel like a "certified fool" who is ready to graduate to something better than TMF.

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