Today, people think of Steve Jobs and Apple when they hear mention of iMac. But the now-iconic trademark was actually transferred to Apple from IoT smart-technology leader Digi International in 1998. As Digi wryly notes on its website, "We assume they did something special with it."
Fast forward to 2023, and Digi has established itself as a key innovator in the Internet of Things (IoT) space.
While Apple has transformed multiple ecospheres with the iPhone, App Store and more, Digi continues to accelerate the expansion of today's network of always-connected, smart devices. The Minnesota-based company's technology is at the heart of cloud-connected smart cities, transportation systems, medical operations, precision agriculture and industrial environments.
Since even before IoT was a thing, Digi has been building machine-to-machine (M2M) and smart devices. From 5G and voice control to environmental monitoring and green technology, Digi stays at the cutting edge of smart technologies by adapting to evolving network standards and data communications around the most advanced protocols integral to the IoT landscape.
With a 91 Composite Rating, DGII stock has now popped onto the IBD Breakout Stocks Index, while the IoT leader looks to connect with a new buy point.
See Who Joins This IoT Leader On The IBD Breakout Stocks Index
Digi Expands SkyCloud To Keep IoT Flying
Earlier this month, Digi debuted the latest version of SkyCloud, enabling effortless systems integrations with remote monitoring and control solutions. At the forefront of this new release, Digi unveiled REST APIs and the ability to deploy device configurations across groups of devices. This latest cloud update emphasizes Digi's commitment to delivering comprehensive solutions for industrial monitoring and control across various sectors, including water management, precision agriculture and environmental compliance.
Digi sports an A SMR Rating, which tracks sales growth, profit margins and return on equity. On May 4, the company posted just over $111 million in revenue for the first quarter, marking a 17% gain over the prior-year quarter. Over the last three years, Digi has generated average annual revenue growth of 18%.
Earnings per share for Q1 rose 22% to 50 cents. For Q2, analysts expect 5% EPS growth, leading to a 17% increase for the year.
Connecting The Dots To An IoT Breakout
Today marks the fifth and final day of a handle for DGII stock. Handles take a minimum of five days to form. Digi rose over 2% Wednesday in volume 61% higher than normal. It closed at 39.11, one penny above a 39.10 entry in a cup with handle.
The stock showed resilience, reversing higher off its lows to end the session near the very top of the day's price range.
In a sign of demand, the stock has flashed multiple weeks of heavy weekly volume in the right side of the base. Trends in Digi's moving averages also point to rebounding technical strength. The 21-day exponential moving average has bolted back above the 50-day and 200-day moving averages. The 50-day line looks poised to retake the longer-term 200-day benchmark.
Meanwhile, the "new" owner of the iMac name continues its own ascent. This month's list of new buys by the best mutual funds showed that top money managers poured money into AAPL stock. The tech bellwether introduced its third-generation 5G smartphones, the iPhone 14 series, on Sept. 7. But focus has now shifted to the iPhone 15 and Apple's Vision Pro computer goggles. Apple stock has seen its own 21-day and 50-day moving averages soar as the stock builds on a new run. During Wednesday's session, it touched a new all-time high.
As Digi International and Apple tap into the intersection of IoT, smart devices, 5G and cloud computing, see if both stocks can connect with a continued climb.
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Follow Matthew Galgani on Twitter at @IBD_MGalgani.
