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By: AllPennyStocks.com
The paperless society has been a lofty goal since offices and businesses became
computerized in the 1980s. At times, it’s seemed unattainable, like world peace.
But it hasn’t stopped some companies in America to continue to aim for its
creation, and at least one has gotten the Federal government in its corner in
its quest.
Marlton, New Jersey-based systems integrator Emtec Federal, a subsidiary of
Emtec, Inc. (OTCBB: ETEC) came out with just such news in early March,
announcing a five-year purchase agreement with the Department of Agriculture
(USDA) valued at $82.5 million, to furnish the department’s International
Technology Services (ITS) arm with servicing and support for its 40,000
employees and their computer networks.
Under this contract, Emtec Federal will provide “procurement and other ancillary
services to support the USDA’s migration to a paperless business environment and
to establish and maintain a consistent, common and compatible technical
infrastructure” within the organization. ETEC is also slated to provide the same
kinds of services to those responding to disaster situations and aid in homeland
security.
ETEC, whose founding dates back to the early 1960s, aims to help clients improve
IT systems and processes -- to transform Information Technology into an
investment that returns true value to those clients. Emtec Federal has been busy
of late, garnering contracts with other branches of the Federal government, most
recently in late February with the U.S. Air Force to provide Samsung flat-panel
display monitors and Lenovo ThinkPad X200 Series Notebooks, a contract worth
approximately $5 million.
The company’s links with Federal government programs and departments has proven
lucrative. The latest quarter for which ETEC reported earnings showed total
gross profit increased 19.9% from $8.8 million to $10.5 million in the same
quarter the year before, and a jump to $2.5 million in operating income from
$1.9 million in the prior-year quarter. Net income leaped to $1.4 million from
$1 million in the comparable quarter, or nine cents per share from seven, an
improvement of about 28%.
Stock in this company, which functions all over the world, hit an intraday high
of $1.67 on the day of the USDA announcement, smashing the previous 52-week high
of $1.35 set late in February. It’s a far cry from the gully of 35 cents in
which ETEC found itself last summer. The products and services it provides to
keep the Federal government functioning – and the rewards coming as a result –
should grab the attention of bargain-seeking small-cap investors, before the
stock price possibly heads much higher.
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