Mike Arnold
Value, growth at reasonable price, long only, tech

Elevated R&D Spend Masks Earnings Power At Image Sensing Systems

Image Sensing Systems (NASDAQ:ISNS) "develops and markets video and radar processing products for use in traffic, security, police and parking applications such as intersection control, highway, bridge and tunnel traffic management, venue security, entry control, license plate recognition and traffic data collection."

ISNS also enjoys an attractive, predictable, scalable and high-margin royalty stream from its licensing agreement with Econolite, which allows ISNS to reinvest the royalty cash flow to build a software solution it calls "Safe Cities." Safe Cities is designed to leverage ISNS' competencies in above-ground detection hardware by adding a high-margin SaaS revenue stream for law enforcement, security and traffic management professionals.

Collectively, ISNS management estimates its end-markets to be up to an $800 million...

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