NCR Corporation (NCR) will move into the final phase to shed its legacy pension expenses this year, allowing its non-GAAP earnings to become GAAP earnings and making NCR a more straightforward technology play, says Arne Alsin, Lead Portfolio Manager at Alsin Capital Management.
“They hit a big pension, a legacy pension, that overwhelmed the company and they are involved in a three-step plan to get rid of the pension, which has been depressing earnings. And they’ll be moving into phase three, the final phase, this year. Once that happens, all of a sudden their non-GAAP earnings become GAAP earnings, and their GAAP earnings are quite substantial,” Alsin said.
Alsin says that at the base level, he uses the simple comparison of earnings with and without the pension expenses to gauge NCR‘s value, and with NCR‘s earnings and their number one standing in numerous verticals, he says the company is going to be a solid play.
“NCR is number one in three different verticals: in banking, in financials and in restaurants. They are also number one in hospitality, but it’s not big enough for it to call yet; it’s still an emerging vertical for them. NCR is involved in a lot of areas that are at the forefront of change, and I think they’re going to do quite well,” Alsin said.
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