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In April, as Napco Security Systems (NSSC
) stock started to drop -- along with the rest of the market -- from a split-adjusted 11 a share, many bailed out. But not Neal Goldman of Goldman Capital Management. By May 14, the stock had tumbled to 6.84. So Goldman upped his stake, to 4.9%. "Despite the stock's fall, sales and earnings are getting better," says Goldman.Napco, mentioned in this column on Dec. 9, 2002, when it was at 4.40, makes electronic locks, fire and burglar alarms, and security cards for building access. A giant win for Napco, according to Goldman, is a recent pact with ADT Security Services, a unit of Tyco International (TYC
) and the largest U.S. installer of security systems, to custom-make a simple-to-use lock system for ADT. Dubbed the Safewatch EZ system, it lets a homeowner arm or disarm the alarm with the turn of a key -- with no code. ADT installs 600,000 security systems a year, and Napco CEO Richard Soloway says that in two years, EZ will be installed in 50% of that volume. Goldman figures Napco should earn 42 cents a share on sales of $60 million in fiscal 2004 ending June 30, and 80 cents on $75 million in fiscal 2005, up from 14 cents on $57 million in 2003. He sees the stock at 20 in a year.Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them. By Gene G. Marcial