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A Scanner Maker Wal Mart Likes

Inside Wall Street


Most investors have yet to react, but some smart-money players are licking their chops over Telxon, a producer of handheld computerized scanners. They've helped push the stock up to 22. These pros think the product that retailing giant Wal-Mart Stores has just ordered from Telxon for some of its outlets will become, before long, the standard scanner system for most retailers.

"Telxon has the lead in the fastest-growing segment of bar-code scanning," says Mitch Kuflik, research director at Brahman Securities. The wireless handheld devices communicate over a radio frequency with a store's central computer. They can be used as portable cash registers or for performing order entry, inventory control, and document-tracking.

Telxon will supply Wal-Mart with its PTC-960 microcomputer and Dataspan 2000 Spread Spectrum wireless communication network. The microcomputer has a laser scanner, using microprocessing and wireless technologies.

Kuflik figures the initial Wal-Mart order will add some $30 million to revenues in the year ending Mar. 31, 1993, for a total of $260 million, up from an estimated $213 million in fiscal 1992. He thinks earnings will rise to $1.50 a share in fiscal 1993 from an estimated $1.12 in 1992. "The Wal-Mart order is just the beginning," says Kuflik.

Other analysts agree. David Nelson of Lehman Brothers says Telxon will benefit from an expected cyclical updating of equipment at the nation's big retailers. He adds that Telxon's stock doesn't reflect the company's growth prospects. One big investor is betting the stock will double in a year.GENE G. MARCIAL

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