Riding High: Data I/O Corp.

(RTTNews) - Shares of Data I/O Corp. (DAIO) have gained 43% so far this year while the S&P 500 Index is up just 7% during the same period.

Data I/O designs, manufactures and sells programming systems to global electronic device manufacturers. The Company's programming systems are used by original equipment manufacturers in automotive electronics, consumer electronics and Internet of Things and their programming center partners, wireless and electronic manufacturing service contract manufacturers.

The markets served by Data I/O, particularly the automotive electronics and Internet of Things, are of high growth and high volume.

Growth drivers for automotive electronics

• Consumers desire advanced car features requiring higher levels of sophistication including infotainment products (audio, radio, dashboard displays, navigation and wireless connectivity) as well as increased safety features and optimized engine functionality • Increasing numbers and size of microcontrollers per vehicle (A microcontroller is a compact microcomputer designed to govern the operation of embedded systems in motor vehicles, robots, office machines, complex medical devices, mobile radio transceivers, vending machines, home appliances, and various other devices. Source IoT Agenda). • Proliferation of programmable microcontrollers to support the next-generation electronic car systems • Increasing use of high-density flash to provide memory for advanced applications that require programming • Increasing complexity to support autonomous vehicles • Increasing need for security solutions for a secure supply chain and lifecycle firmware integrity

Growth drivers for IoT: including industrial and consumer devices

• Securely controlling groups of connected devices through a secure supply chain and lifecycle firmware integrity • Adding intelligence and processing into devices • Connecting previously unconnected devices to networks and the internet (such as intelligent thermostats and lighting) • Emergence of new devices and applications (such as wearables) (Source: The Company's 10K filing)

The Company has had 4 consecutive years of revenue growth and 3 consecutive years of profitability to its credit, thanks to reinvigoration of its core business through new product development, cost control and global sales.

Last month, at the Embedded World Conference and Exhibition in Nuremberg, Germany, the Company unveiled its next generation Managed and Secure Programming (MSP) technology, Sentrix.

Data I/O Corp.'s SentriX Platform, developed in partnership with leading silicon vendors and security experts, enables a trusted, secured, and cost effective solution for OEMs seeking to secure the supply chain and maintain firmware integrity.

For the first quarter ended March 31, 2017, the Company reported a net income of $979,000 or $0.12 per share, on net sales of $7.2 million, which is a multiyear high for the first quarter. This compares with a net loss of $168,000 or $0.02 per share and net sales of $4.6 million in the first quarter of 2016.

For the 2017 first quarter, gross margin as a percentage of sales was 57.7% compared to 54.8% in the first quarter of 2016.

Contrary to the typical seasonal pattern where the Company's business softens between Thanksgiving and Chinese New Year, it has been quite strong this year, which helped Data I/O deliver big in the first quarter of 2017.

During the Company's Q1, 2017 earnings conference call on May 5, 2017, Anthony Ambrose, Data I/O Corp.'s CEO, President and Director said that Q2 and Q3 are typically the Company's strongest quarters.

At March 31, 2017, the company had zero debt, $10.5 million in cash and 8,049,000 shares outstanding.

Given the facts that Data I/O Corp is stable financially, has a strong balance sheet and operating leverage in addition to a favorable market, this stock deserves a look.

DAIO closed Friday's (May 5) trading at a new 52-week high of $5.98, up 25.37%.