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Insignia Systems, Inc. (NASDAQ:ISIG) Explodes on Earnings Surprise

Insignia Systems, Inc. (NASDAQ:ISIG)

Insignia Systems, Inc. (NASDAQ:ISIG) stock was up over 80% in morning trading after the company released their Q3 earnings yesterday after the market closed. The global consumer marketing firm reported increases in Net Sales, Gross Profit, and Net Income.

ISIG stock closed yesterday at $1.36, then gapped up to open at $1.58 before hitting the inter-day high of $2.19. While ISIG shares are down year-to-date, and for the past year, they are up over 35% during the past quarter.

Insignia Systems, Inc. (NASDAQ:ISIG)

Q3 Earnings

Net sales increased 19.4% to $7,723,000 in Q3 2017, from $6,469,000 in Q3 2016, primarily due to a 30.4% increase in the number of signs placed. Gross profit in Q3 2017 increased to $2,743,000, or 35.5% of net sales, from $2,000,000, or 30.9% of net sales, in Q3 2016. The increased gross profit was primarily due to an increase in sales and a decrease in cost of services due to the discontinued sale of The Like Machine. Gross profit is highly dependent on sales levels due to the relatively fixed nature of a portion of Insignia’s payments to retailers. Net income for Q3 2017 was $451,000, or $0.04 per basic and diluted share, compared to a net loss of -$167,000, or (-$0.01) per basic and diluted share, for the same period last year.

Insignia Systems, Inc. (NASDAQ:ISIG) President and CEO Kristine Glancy commented, “We are pleased with our quarterly results, having delivered both top and bottom line growth. The quarterly results reflect the continued progress against our strategic initiatives with the addition of new CPG customers, strengthening the relationships with existing clients, and gaining traction on business development projects. These strategic initiatives are expected to positively impact the remainder of 2017 and beyond.”

ISIG Stock

The consensus, one-year price target for ISIG stock is $3.00. Insignia Systems, Inc. (NASDAQ:ISIG) reported a per share loss for 2016 of (-$0.11) on sales of $24.9 million. However, it appears that management has set the course for a more profitable 2017.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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