NCR Should Benefit From Self-Service Trend - Barron's

NCR Corp. (NCR), makes automated kiosks and ATM machines for an increasingly automated world. But shares have sunk this past year as investors dump anything that smacks of financials or retailers. United Technologies' (UTX) recent unsolicited $2.6 billion bid, at a 66% premium, for NCR rival Diebold (DBD) barely even registered on NCR shares. Barron's says investors are discounting the strong trend towards automation as the financial and retail sectors try to streamline costs and raise margins.

NCR's $23 shares equal a 15.4 times projected 2008 profits, vs. 19.3 times for Diebold. It's got less long-term debt (15% of capital) than Diebold (33%), and more cash too. Although ATM spending at its clientele of large U.S. banks is still high, 75% of NCR's ATM and financial self-service sales come from overseas anyway. Bulls think retail automation is the next growth story. Not just expansion of self-checkout and automated merchandise returns in stores, but also airport, hotel, car rental and even restaurant self-service innovations could give NCR another year of double-digit sales growth.