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Why Invest In Archos In 2014

Jan. 06, 2014 11:26 AM ETArchos S.A. (ACOSF)
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Seeking Alpha Analyst Since 2013

Business and Management graduate from Saint Joseph University in Beirut, and currently CFA Level 3 candidate. Trading forex, Investing in high-tech stocks and researching new investing opportunities.

Archos (OTC: OTC:ACOSF) (JXR: FP), the French manufacturer of tablets and androids have many upcoming events in 2014 that should be well analyzed. First of all, as per Loic Poirier, Chief executive of Archos SA, the company shipped in 2013 over 2 million units of its products and is still the third largest supplier in Europe.

1- New tablets:

Decathlon (a major French distributor of sporting goods) and Archos entered into an agreement project that will be developed in 2014 aiming to introduce a new Smartphone dedicated exclusively to outdoor adventurers. By this development project Archos will extend its client base to include sport lovers. With this new Smartphone, customers are expected to talk for over 22 hours with a fully charged battery. It also contains water resistant setting for underwater photography and a screen responding to gloved fingers for a competitive price of 313 USD.

Additionally, Archos added two 4G LTE Smartphones to its diversified mobile devices segment. The first named 45 Helium has a screen of 4.5 inches, 4 GB built-in memory and a 5 megapixel rear camera for 200 USD. The second, Archos 50 Helium has a screen of 5 inches with 8 GB storage and 8 megapixels camera for 250 USD. Customers who cannot afford buying Apple (AAPL) or Samsung (OTCPK:SSNLF) products, can have access to the latest technologies with a cheap price through these Smartphones.

2- Investing in Logic Instrument:

Logic Instrument (ALLOG), a French manufacturer of military and industrial tablets, entered recently into a deal with Archos. Logic will issue an additional 2.2 million shares and Archos will acquire 70% of this issuance. Archos will expand through the business market with the best experience of Logic instrument dealing with B-2-B (Business to Business) offering itemized products in terms of software and hardware.

3- Financial Position:

Despite the anticipated decrease in sales in 2013, the company has a strong financial position. In fact, the company's debt was reduced from 16.5 million EUR in 2011 to 8 million EUR in 2012 and is expected to decrease more in 2013, leading to better financial and solvency ratios.

4- Release of Robopocalypse:

Steven Spielberg's Robopocalypse story (based on the novel written by Daniel Wilson) is back to its roots after a pause to reduce costs. This Science-fiction film is expected to be released on April 25, 2014 and its main stars are Chris Hemsworth, Anne Hathaway and Ben Wishaw. A film talking about when the technology currently running the world will turn against us, with the main character called Archos, a robot.

The shooting will begin soon as suggested by the recent release of some storyboards.

5 - New product lines:

In 2014, Archos will be launching new products other than the smartphones, tablets and androids as announced earlier. The company is expanding its main activity by the introduction of the smart watches, health trackers and connected home devices such as:

- Blood Pressure Monitor: including a memory of over 40 measurements;

- Connected scale: measuring body shape according to height and mass for 4 users;

- Activity tracker: monitoring daily foot steps and counting calories burned throughout the day;

- A weather station: showing CO2 levels, humidity and temperature indoor and outdoor.

All these devices can be connected to an application for daily tracking and creating graphs and metrics, and goal setting. In this way, Archos will present a whole package for creating a "Smart home".

These new products will show off at the upcoming 2014 Consumer Electronics Show, on 7 January.

With the launch of these new products, Archos won't be limited any more to the android and Smartphone industry. It will enter the big electronic consuming sector and will satisfy new clients needs.

All these mentioned events are expected to have a positive effect on Archos and suggest a higher rate to be achieved throughout the year. In fact, the new products unveiled by Archos anticipate an increase the company's sales, especially that the prices are well below those of the competitors Apple or Samsung . In the end, we recommend buying the stock at its current rate as a long term investment hoping to beat the market in 2014.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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