NICE Stock at a Nice Price

| About: NICE-Systems Limited (NICE)

Nice Systems is an Israeli tech company that provides multi-media recording solutions used primarily for call centers and telephony applications as well as security solutions for private and public sectors. Nice has been a personal favorite stock of the Inspector's for the last four years. Recently, it has touched lows not seen for a very long time. It is the Inspector's sincere belief that NICE is suffering from "guilt by association." NICE is heavily associated with financial institutions, since they are its main customers. However, as pointed out recently by UBS analyst Darren Shaw, there is a lot of growth left for this stock:

UBS analyst Darren Shaw upgraded NICE to "Buy" from "Neutral" and said investors may be overlooking the company's merits by taking a "non-selective" view of its sector. NICE serves businesses such as call centers, and telephony applications as well as financial and government institutions and air-traffic control sites.

Investors have been concerned about technology companies selling to large corporations, especially in the financial-services sector.
Shaw estimates that about 30 percent to 40 percent of NICE's revenue is from financial institutions of some kind. But he noted that this includes "credit card issuers, collection agencies, retail banks and other entities not directly linked to subprime issues."
The analyst said NICE is also seeing growing demand for its security products, "and is becoming increasingly involved in large-scale deployments."
"We believe these early stage markets offer significant scope for growth in the coming years," Shaw added. And with $400 million in cash, the company will also likely to make at least one acquisition this year in the security market."

The appetite for call centers and for call center technology is unrelenting. A recession in the US will not change that. The explosion of call centers around the globe continues to expand. Secondly, the penetration of call center technology into previously unsophisticated operations is now affordable thanks to open standards most explicitly demonstrated by Voice over IP and VXML. This has made call recording and video/desktop capture more pervasive.

Lastly, the plight of both public and private sector in regards to security bodes well for NICE. As sad as it is to admit, September 11 was a boon to business. Homeland security budgets grew massively, and a lot of that money went into the kind of tech that NICE provides. The point is, that need is not going away. The growth may not be as dramatic seven years after September 11, but it is still a priority for all governments. In short, the need for what NICE provides is not going away anytime soon.

At the current prices, NICE is looking nice.

DISCLOSURE: I own shares of NICE ADR.