One of the most interesting stocks listed on Euronext Amsterdam Stock Exchange is a company called TomTom (TMOAY, TMOAF).
For investors unfamiliar with TomTom - the company is leading in the personal navigation devices (PNDs) market where it competes directly with Garmin (GRMN). The company also sells navigation components (maps, software, and traffic information) to customers in the automotive sector.
Lately, TomTom has become a leading provider of fleet management solutions, especially in Europe. On top of that TomTom creates GPS sports watches, and launched the TomTom Bandit Action Camera in May this year. This camera was the first of its kind with a built-in media server, designed for action and competing directly with GoPro (GPRO).
Most of the time TomTom is mentioned in the financial media it is due to rumors that the company is being taken over by Apple (AAPL), Samsung (SSNLF) or another tech giant.
This time, it is different, and I urge TomTom to have a look at a company in the telematics sector. As mentioned before, revenues from fleet management solutions that TomTom shares under their Telematics business unit is growing at a fast clip.
Market size
Market research firm MarketsandMarkets expects the commercial telematics market to grow from $20.02 billion in 2015 to $47.58 billion by 2020 worldwide. In market size, Europe is expected to be the largest, while the Middle East & Africa, Asia-Pacific (APAC) and Latin America are expected to experience high growth figures.
The Telematics market is growing at a fast clip, and relative value analysis shows that there are some US-listed undervalued opportunities in the telematics industry that TomTom could snap up. Two of them I will discuss here.
The first one is a company called Pointer Telocation (PNTR).
Pointer Telocation Ltd., based in Israel, is, for the most part, a provider of AVL solutions provider to Fleet, Automotive, Insurance, Cargo and Public-safety industries. Investors that are not familiar with the name AVL, AVL means Automatic Vehicle Location Device.
Emerging markets like Israel, Argentina, Mexico, Brazil and South Africa are important markets for Pointer in the fleet management market.
The second one I want to talk about is a company called MiX Telematics (MIXT)
MiX Telematics is a global fleet management solutions provider from South Africa. The company delivers telematic solutions in more than 120 countries and has a network of more than 130 fleet partners worldwide. Customers include Baker Hughes, BP, Chevron, DHL, Nestlé, PepsiCo, Praxair, Schlumberger, Shell, and many more.
Combining TomTom with Pointer and/or MiX Telematics would lead to new markets and new products for TomTom.
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