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Logitech Riding High on Strong Portfolio & Positive Trends


On Sep 19, we issued an updated research report on leading Logitech International SA LOGI.

Founded in 1981 in Switzerland, Logitech International S.A., is a computer peripherals company. Presently, Logitech is in the midst of a diligent portfolio streamlining drive to boost its core business areas. Logitech has been actively divesting its non-profit assets and focusing on core business areas to reduce business costs.

In this regard, it has divested its non-profitable business – like LifeSize and OEM business – to concentrate on profitable areas like retail and online sales of accessories to boost margins. Also, last year, the company had undergone a major brand redesign drive by creating a sub-brand ‘LOGI’ to foray into new business domains. Going forward, Logitech intends to work on the designing, manufacturing and distribution system of its core business to improve operational efficiency.

In terms of business segments, Logitech’s Retail and Gaming businesses have been charting a robust growth trajectory, backed by innovative product launches and marketing initiatives. Also, strategic cloud-based video collaborations are proving to be beneficial for Logitech’s cloud-based video conferencing services. Based on the present industry trends and strong sales in the end-markets, including the Americas, EMEA, and Asia Pacific the company is highly optimistic about the further growth of this business segment.

Logitech has been consistently betting big on innovation to expand its product lines and attract more customers. Fortunately, for the company, its state-of-the-art mouse, and keyboard switches and batteries have piqued the interest of tech-savvy customers and investors.

Some of the noteworthy product launches made during fiscal second-quarter 2017, include UE ROLL 2 speaker- Drippy UE ROLL 2, CREATE Backlit Keyboard Case for the 9.7-inch iPad Pro, smart home control devices Logitech Pop Home Switch Starter Pack and Pop Add-On Home Switch and silent mice M330 Silent Plus and M220 Silent Wireless Mice.

This apart, Logitech has an ardent eye for strategic acquisitions to supplement is core business areas. In order to boost the Gaming business, the company recently acquired Mad Catz Interactive’s Saitek product portfolio for $13 million in cash. Moreover, it has been successful in integrating its previous buyouts, namely Jaybird and Ultimate Ears which have significantly benefited its headphones business. We believe that the company’s sound financial health and strategic capital deployment initiatives provide ample scope for further bolt-on acquisitions in the future, thus aiding it to fortify its global footprint.

Logitech currently sports a Zacks Rank #1 (Strong Buy). Investors may also consider other favorably placed stocks like LG Display Co., Ltd. LPL, Identiv Inc. INVE and Alps Electric Co Ltd APELY. While LG Display sports the same rank as Logitech, Identiv and Alps Electric carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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