Since I recommended shares of NCR (NYSE: NCR ) in September, the stock has risen by more than 37%. You might be down slightly if you followed Goldman Sachs' latest buy recommendation of the stock in February, but I don't think investors who followed this ill-timed call have much to worry about. The world's leading manufacturer of ATMs continues to grow this business and win market share globally, but the company also appears ready to ramp up its retail solutions systems outside of the United States as well, and more specifically in Brazil.
NCR's relationship with Brazil dates back 75 years, long preceding Brazil's rapid economic rise that has many companies looking for entry into this emerging market. Brazil has always been important strategically for NCR, and today it serves as a manufacturing and innovation base for many of its latest technologies. With the World Cup scheduled to be played in Rio de Janeiro in 2014 and the Olympic games following two years later, NCR has been in the perfect position to fill the need of one of the world's fastest growing ATM markets.
As these landmark events approach, NCR has also recently beefed up its efforts to grow its retail solutions business substantially in the country. According to Euromonitor International, Brazil is the second fastest growing retail market in the world, and NCR is strategically positioning itself to capitalize on this growth in a big way. In the recent months, NCR has been expanding its retail channel partners and building a sales network in the country. The company is now focused on getting its products in large convenience chains, supermarkets, and big-box stores.
While NCR already has a foothold in the country in its traditional commerce solutions at point-of-sale, the company is looking to sell local retailers on its industry-leading self-checkout technology that is used in the states by companies such as Wal-Mart (NYSE: WMT ) and Home Depot, among a host of grocery chains. Wal-Mart already has close to 500 stores in Brazil including 49 supercenters, but the majority of its stores in the country are smaller neighborhood-based stores called Todo Dia. NCR's existing manufacturing base in the country and its innovation through localized R&D has the company in a strong position to win market share in this highly coveted retail market.
While NCR has had quite a run over the last several months, its ATM business remains strong globally, and it continues to outperform and win important market share from competitors Diebold (NYSE: DBD ) and Wincor Nixdorf. The potential revenue growth from its Brazilian retail exposure adds a dimension that could boost the stock even further. It bears watching to see how its strategy plays out, but this company with all cylinders firing remains a great play on the economic rise of Brazil.
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