AVX Corp (AVX) analysts keep raising estimates, this time on solid quarterly results. The CEO sounds optimistic and the fundamentals keep getting better and better.
Shares are also poised for a breakout and you don’t want to miss that move on this Zacks #1 Rank (Strong Buy).
AVX Corp makes passive electric components and related products to store, filter and regulate electricity. The company serves the telecom, medical devices, aerospace and many other industries.
On Oct 26 that showed a 9% sequential increase in revenue, to almost $431 million. The top line is up about 39% since the same period last year. Net income came int at $68 million.
Earnings per share was 6 cents ahead of the Zacks Consensus Estimate at 40 cents. These results are unaudited, but if they hold up it will be the sixth consecutive earnings surprise.
Comments from the CEO were encouraging. He highlights included the strengthening demand and “[AVX’s] financial position remains exceptionally strong.”
After the new the Zacks Consensus Estimate was up a dime, to $1.40, which is good enough for a 69% growth rate. Next year analysts are looking fro earnings to be 2 cents lower, but given the upward trajectory of the consensus that could easily change. Forecasts for fiscal 2012 were up 12 cents on average, to $1.38.
Shares are trading with great valuations as well. The forward P/E is about 11 times and the PEG ratio is 0.9. AVX’s price-to-book is only 1.3 times, so some tradition value investors may be interested as well.
While the ROE is inline with he industry, at 9.5% the company operates with a net profit margin north of 12%. AVX’s peers are averaging a 7.6% margin.
Shares of AVX have had trouble getting past this point of resistance recently. However, given the solid quarterly results last week and rising estimates there is a good chance that we see a break out very soon.
Read the August 4th Feature Here