DG FastChannel Inc. (DGIT) Time to Make a Fast Investment?

DG FastChannel, Inc. (DGIT) is a digital media technology company which specializes in electronic delivery of advertisements, video news releases, online publications and a host of other electronic media. The company acts as a sort of middleman between the owners of various content and other businesses which are interested in using some of the owners' content. The company operates primarily through three nationwide digital networks operating out of Texas, Georgia and New Jersey, while at the same time sending digital media throughout the United States, Canada and Europe. Recently the company has been in the news with the announcement of a new Chief Technology Officer, Gregory Smith who is coming from Move Networks which is a business leader in streaming video technologies. The stock is moving in anticipation of changes which Mr. Smith could be implementing to put DG FastChannel more into the fast lane with the ever evolving digital media technology market place. 

From a technical analysis point of view DGIT has some very positive signals working in its favor. The stock is current above various length price moving averages, shorter term being 10 and 21 day averages, medium term being a 50 day moving average and longer term averages being 100 and 200 days. The RSI signal is showing that DGIT has moved from a reading under 40 within the last two weeks to a reading over 60 as of 4/20/09. There is defiantly upward pressure on the stock which can be seen by the current unusually high volume (2 to 3 times the 50 moving average of volume) on days during which the stock is moving up.

From a fundamental standpoint DGIT is currently in a strong position to take advantage of the changing economic conditions which could leave many of its competitors in dire straits. As of 12/31/08 DGIT had a current assets to current liabilities ratio of almost 1.5 and a total assets to total liabilities ratio of 2.3. Revenues have been growing each of the last four quarters by an average rate of 21 percent despite the economic conditions, while at the same time operating income has grown by an average of 24 percent. 2008's profit margin was 9.6 percent while during the same year DGIT was running an operating margin of greater than 24 percent; ROA for the trailing twelve months ending 12/31/08 was 6.49 percent and the ROE for the same time period was 6.53 percent. I am looking for a price target of between $38 and $40 per share which is still a far cry from the $120 per share the company was trading near back in 1996.