AIM:SPSC

Stock Analysis Report

Executive Summary

Spectra Systems Corporation invents, develops, and sells integrated optical systems in the United States, Europe, and internationally.

Rewards

Trading at 1.6% below its fair value

Earnings are forecast to grow 20.9% per year

Risk Analysis

Dividend of 3.89% is not well covered by earnings

Does not have a meaningful market cap (£62M)



Snowflake Analysis

Flawless balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Spectra Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SPSC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

SPSC

0.3%

GB Electronic

1.7%

GB Market


1 Year Return

42.1%

SPSC

27.5%

GB Electronic

8.1%

GB Market

Return vs Industry: SPSC exceeded the UK Electronic industry which returned 27.5% over the past year.

Return vs Market: SPSC exceeded the UK Market which returned 8.1% over the past year.


Shareholder returns

SPSCIndustryMarket
7 Day0%0.3%1.7%
30 Day0%4.1%0.1%
90 Day3.8%4.5%0.6%
1 Year48.4%42.1%29.7%27.5%13.8%8.1%
3 Year720.9%575.0%67.0%59.1%19.2%4.0%
5 Year681.8%542.9%118.9%100.6%40.2%8.0%

Price Volatility Vs. Market

How volatile is Spectra Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Spectra Systems undervalued compared to its fair value and its price relative to the market?

1.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SPSC (£1.35) is trading below our estimate of fair value (£1.37)

Significantly Below Fair Value: SPSC is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SPSC is poor value based on its PE Ratio (31.3x) compared to the Electronic industry average (21.5x).

PE vs Market: SPSC is poor value based on its PE Ratio (31.3x) compared to the UK market (17.3x).


Price to Earnings Growth Ratio

PEG Ratio: SPSC is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: SPSC is overvalued based on its PB Ratio (3.3x) compared to the GB Electronic industry average (2.2x).


Next Steps

Future Growth

How is Spectra Systems forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

20.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPSC's forecast earnings growth (20.9% per year) is above the savings rate (0.5%).

Earnings vs Market: SPSC's earnings (20.9% per year) are forecast to grow faster than the UK market (12.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SPSC's revenue (5.7% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: SPSC's revenue (5.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SPSC's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Spectra Systems performed over the past 5 years?

52.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SPSC has high quality earnings.

Growing Profit Margin: SPSC's current net profit margins (24%) are lower than last year (32.8%).


Past Earnings Growth Analysis

Earnings Trend: SPSC has become profitable over the past 5 years, growing earnings by 52.4% per year.

Accelerating Growth: SPSC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SPSC had negative earnings growth (-38.3%) over the past year, making it difficult to compare to the Electronic industry average (-16.7%).


Return on Equity

High ROE: SPSC's Return on Equity (10.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Spectra Systems's financial position?


Financial Position Analysis

Short Term Liabilities: SPSC's short term assets ($16.4M) exceed its short term liabilities ($2.2M).

Long Term Liabilities: SPSC's short term assets ($16.4M) exceed its long term liabilities ($1.5M).


Debt to Equity History and Analysis

Debt Level: SPSC is debt free.

Reducing Debt: SPSC has not had any debt for past 5 years.

Debt Coverage: SPSC has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SPSC has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: SPSC has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if SPSC's debt is covered by short term assets.


Next Steps

Dividend

What is Spectra Systems's current dividend yield, its reliability and sustainability?

3.89%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%2.0%markettop25%5.2%industryaverage1.5%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: SPSC's dividend (3.89%) is higher than the bottom 25% of dividend payers in the UK market (1.96%).

High Dividend: SPSC's dividend (3.89%) is low compared to the top 25% of dividend payers in the UK market (5.21%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, SPSC has been paying a dividend for less than 10 years.

Growing Dividend: SPSC's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (121.8%), SPSC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Spectra Systems's salary, the management and board of directors tenure and is there insider trading?

7.9yrs

Average management tenure


CEO

Nabil Lawandy 0

23.4yrs

Tenure

US$510,554

Compensation

Dr. Nabil M. Lawandy, Ph.D. is the Founder of Spectra Systems Corporation and has been its Chief Executive Officer and President since July 1996. Dr. Lawandy serves as the President, Chief Technology Offic ...


CEO Compensation Analysis

Compensation vs Market: Nabil's total compensation ($USD510.55K) is above average for companies of similar size in the UK market ($USD333.36K).

Compensation vs Earnings: Nabil's compensation has been consistent with company performance over the past year.


Management Age and Tenure

7.9yrs

Average Tenure

Experienced Management: SPSC's management team is seasoned and experienced (7.9 years average tenure).


Board Age and Tenure

12.9yrs

Average Tenure

73yo

Average Age

Experienced Board: SPSC's board of directors are seasoned and experienced ( 12.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Nabil Lawandy

    Founder

    • Tenure: 23.4yrs
    • Compensation: US$510.55k
  • Brian McLain (43yo)

    CFO & Company Secretary

    • Tenure: 2.9yrs
  • Amer Sidhu

    Managing Director of Ics Operations

    • Tenure: 7.9yrs

Board Members

  • Don Stanford (68yo)

    Non-Executive Director

    • Tenure: 0yrs
    • Compensation: US$27.00k
  • Clive Hohberger

    Member of Technology Advisory Board

    • Tenure: 0yrs
  • Nabil Lawandy

    Founder

    • Tenure: 23.4yrs
    • Compensation: US$510.55k
  • Brian Wilson

    Member of Technology Advisory Board

    • Tenure: 0yrs
  • Joseph Calo

    Chairman of Technology Advisory Board

    • Tenure: 0yrs
  • H. Geysen

    Member of Technology Advisory Board

    • Tenure: 0yrs
  • Shaoul Ezekiel

    Member of Technology Advisory Board

    • Tenure: 0yrs
  • Harold Fetterman

    Member of Technology Advisory Board

    • Tenure: 0yrs
  • Buddie Penn (81yo)

    Non-Executive Chairman

    • Tenure: 8.5yrs
    • Compensation: US$27.00k
  • Martin Jaskel (73yo)

    Non-Executive Director

    • Tenure: 12.9yrs
    • Compensation: US$27.00k

Company Information

Spectra Systems Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Spectra Systems Corporation
  • Ticker: SPSC
  • Exchange: AIM
  • Founded: 1996
  • Industry: Electronic Equipment and Instruments
  • Sector: Tech
  • Market Cap: UK£61.962m
  • Shares outstanding: 45.90m
  • Website: https://www.spsy.com

Number of Employees


Location

  • Spectra Systems Corporation
  • 40 Westminster Street
  • 2nd Floor
  • Providence
  • Rhode Island
  • 2903
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SPSYAIM (London Stock Exchange AIM Market)COM SHS USD0.01GBGBPJul 2011
SPSCAIM (London Stock Exchange AIM Market)YesCommon StockGBGBPJul 2011
SCTQOTCPK (Pink Sheets LLC)COM SHS USD0.01USUSDJul 2011

Biography

Spectra Systems Corporation invents, develops, and sells integrated optical systems in the United States, Europe, and internationally. It operates through three segments: Authentication Systems, Secure Tra ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 21:42
End of Day Share Price2019/12/13 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.