Originally appeared on April 10th, 2012 in the newsletter.
We are in the midst of a revolution. The revolution could be referred to as a data or a data collection revolution. The actives we engage in throughout our daily lives are becoming so ‘connected’ that whole new possibilities in terms of tracking, monitoring and measurement are now and will be possible. As a result, societies around the world will need to deal with a plethora of new forms of privacy issues. In the midst of tracking that is personal in nature, is an area that deals with the impersonal; physical structures and machines. This form of tracking is in the background because it is not personally invasive and will largely lack an appeal to marketers.
Mistras Group (MG) is a provider of engineering services specializing in nondestructive testing to evaluate the structural integrity of a range of critical infrastructure components. Part of Mistra’s offering is tech based in that it incorporates acoustic emission, digital radiography, infrared, wireless and ultrasonic sensors to alert customers of structural problems before failure occurs.
Developments in technologies have provided us with many new ways to track and monitor, but most of the attention is being paid to that which is developed to track you and I. As an investor, forget about the tracking of people. Look at the tracking and monitoring of machinery, buildings, bridges, pipelines and other structures. This is where businesses will see real value in such products and pay for the products and services. Avoiding failures means more money at the end of the day and any product/service that can advert such failure is going to be commanded.
I like MG and other companies in the same field as a long-term play on technological products for infrastructure development and maintenance. Since July, MG has run from $16 to $26 per share. That’s over 60% share price appreciation. In today’s market environment, I would look for a pullback as an opportunity to develop a position in this stock. Set your target around $20 for MG.
