Stock investing: ATM maker Diebold looks to new markets

Companies with dominant market shares of widely used products are in an enviable position. But as markets become more saturated, those companies must look elsewhere for growth. Diebold aims to take on this challenge in several ways. DIEBOLD INC. (New York symbol DBD; www.diebold.com) is a leading maker of automated teller machines (ATMs). It also makes safes, vaults and building-security systems. To cut its reliance on ATMs, the company now offers more services, such as software, ATM maintenance and processing customer transactions. The company now gets over 50% of its revenue from services. That gives it recurring revenue and helps cut its risk.

Stock investing: More than half of Diebold’s revenue now from overseas markets

Diebold has been selling ATMs to overseas banks. In Asia and Latin America, rising prosperity is giving banks more cash to invest in ATMs. As well, ATM demand continues to rise because installing these machines is cheaper than hiring tellers. Diebold now gets 55% of its revenue from overseas markets. The company continues to spend around 3% of its revenue on research. [ofie_ad]

Stock investing: Diebold develops a new system for mobile phones

Diebold recently developed a new system that helps cut down on fraud by letting bank customers lock and unlock their ATM cards using their mobile phones. In the event of suspicious activity, customers will be able to stop unauthorized withdrawals by sending a text message that will lock their card. Demand for this service will grow as more and more people use smartphones to do their banking. In the November edition of Wall Street Stock Forecaster, we discuss Diebold’s efforts to keep costs down by outsourcing production. We also look at whether it can continue to develop innovative products and services. We conclude our analysis with our clear buy/sell/hold on Diebold. The company is just one of 20 stocks we analyze in this issue of our Wall Street Stock Forecaster. You can get Wall Street Stock Forecaster, with our advice on U.S. stock investing written especially for Canadian investors, along with 5 in-depth Special Reports FREE, as well as FREE access to our weekly Email/Telephone Hotlines (which keep you up to date on our U.S. stock market investments between issues) when you subscribe now. Click here to get started right away.

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Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

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One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

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