Daktronics: 7 Reasons To Buy This $7.50 Stock With The 3% Yield And Insider Buying

| About: Daktronics, Inc. (DAKT)

In an uncertain market like the one we are currently facing, I have found finding stocks with a healthy yield is a solid defensive strategy. Every now and again I am fortunate to find an equity with a solid and growing yield, good growth prospects and that is starting to attract insider buying. One such stock is Daktronics (DAKT).

7 reasons DAKT offers a compelling case for value and growth investors at $7.50 a share:

  1. An insider picked up nearly $300K in new shares in early July.
  2. DAKT yields 3.2% and the dividend payouts have grown at an over 22% annual clip over the past five years.
  3. Analysts expect revenues to increase 6% to 8% in FY2012 and FY2013. The company earned 20 cents a share in FY2011, but is expected to make 31 cents in EPS in FY2012 and 44 cents in FY2013.
  4. The stock is selling near the bottom of its five year valuation range based on P/B, P/S and P/CF.
  5. The company has over $50mm in net cash on its balance sheet (over 15% of market capitalization).
  6. The stock is selling at 17 times forward earnings, a discount to its five year average (27.1).
  7. The stock is starting to bounce off around the same technical bottom it established at the depths of the financial crisis (see chart).

(Click to enlarge)

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in DAKT over the next 72 hours.