Value In Voxx? (VOXX)

Todd Sullivan, Co-Founder and Managing Partner of Rand Strategic Partners presented at the Harbor Investment Conference yesterday and discussed Audiovox Corporation VOXX. Audiovox is the number one player in audio equipment for car trips, and Sullivan believes the company is severely undervalued at these levels. The company has a strong distribution network, selling its products in places like Target TGT and Wal-Mart WMT. It's expanding its original equipment manufacturer (OEM) relationship, specifically by putting its products into Ford F and BMW now. In 2010, the company acquired Invision for $10.3 million, and will produce $50 million in revenues, which Sullivan believes will be an incremental driver of growth in 2011. Sullivan believes that 2011 margins will rise up 280 basis points, mostly on higher end products the company is producing. Sullivan said that the rising car sales domestically are a boon to Audiovox, which in addition to its audio equipment for cars, makes the Sirius SIRI and XM satellite radio products in cars. Sullivan said that for 2011 he sees U.S. car sales around 13-14 million new cars being sold, and believes it could be as high as 16-17 million by the middle of the decade. Audiovox also has new products such as the CarLink, which allows you to remote start your car from a further distance than normal, and Lane Departure system. The Lane Departure system notifies you if you are swerving lanes rapidly, but is smart enough to distinguish between making turns on a road. It also produces a rear view camera lens, which Sullivan said is currently being implemented in all minivans by 2014, as part of a federal mandate. Sullivan said that by 2012, he expects the company to report over $100 million in revenues from the Invision deal, and net income to rise by as much as 50%. The company has $2.47 per share in cash, and is currently trading at a discount to net current asset value (NCAV), which is $10.95 per share. He believes book value for the company is as high as $16.26 per share.