No surprise—Noble likes Relm’s stock
Give Noble International Investments credit.
In a business environment where stock analysts have been criticized for recommending stocks of companies with which their employers conduct investment banking, Noble was up front about its close relationship with Relm Wireless, West Melbourne, Fla., at the same time it issued a “buy” recommendation on Relm’s stock with a 12-month price target of $3 per share.
Earlier this year, Boca Raton, Fla.-based Noble helped Relm to raise $1.8 million to fund Relm’s Project 25 digital radio product development. The transaction involved the sale of securities, an individual unit of which included one share of Relm common stock and one warrant to purchase another share. Noble committed to purchase any of the units left unsold at the conclusion of the offering. It is not clear whether Noble currently owns stock in Relm.
But Noble disclosed that it “may at some time effect transactions in the securities mentioned.” Additionally, Noble is contracted with Relm to perform investment banking services “and therefore should not be construed as independent.” Noble also is a market-maker, which means it uses its own capital, research, retail or systems resources to represent stocks and to compete with other market-makers to buy and sell the stocks or issues it represents.
Relm is known for its land mobile radio equipment for use by the federal, state and local governments, businesses and public safety agencies. Its equipment sells under the BK Radio, Uniden and RELM brand names.
The U.S. Forest Service buys one of Relm’s portable two-way radio products in large numbers for use in firefighting. Last month, the Forest Service’s National Interagency Fire Center placed an emergency order for 400 units because of the unusual number of large fires this season.
Relm’s stock traded at 85 cents on June 25, the day Noble issued its buy rating. In past weeks, the volume of Relm stock traded on a given day rarely has exceeded 10,000 shares, and some days none trades. No shares traded today or last Friday. On June 27, the stock closed at 74 cents with 3,100 shares traded.
On April 16, an unusually high volume of 181,000 shares traded in a range of 85 cents to $1.02, and the stock closed at 85 cents. In early 2000, the stock had reached $8 per share on news that the company might form an alliance with Hitachi Denshi, Tokyo, which led to unfounded speculation that Relm might enter the then-hot cellular handset manufacturing business.