Value Stock: Measurement Specialties (MEAS)

Measurement Specialties, Inc. (MEAS) recently surprised on the Zacks Consensus for the third time in the last four quarters as sales returned to pre-recession levels.

Measurement Specialties manufactures sensors and sensor-based systems for OEM applications for global customers.

Headquartered in Hampton, Virginia, its systems measure precise ranges of physical characteristics such as pressure, temperature, force, vibration, humidity and photo optics.

Fourth Quarter Sales Back to Pre-Recession Levels

On June 9, Measurement Specialties announced its fiscal fourth quarter results which surprised on the Zacks Consensus by 22%.

Earnings per share were 28 cents compared to the Zacks Consensus of 23 cents. It lost 22 cents in the year ago quarter.

Sales in the quarter rose 43% to $61 million from the fiscal fourth quarter of 2009. That year ago quarter was at the height of the recession, however.

For the year, sales rose 3% to $209.6 million and the company remained profitable, despite the recession.

Economic conditions had clearly improved by the fourth quarter. Bookings were also at a record high of $66 million which produced a book to bill of 1.1.

Bookings are orders which are supported by purchase orders. Billings are orders the company has invoiced and which then result in actual sales. A 1.1 book to bill ratio is the ratio of bookings to billings.

Measurement Specialties also saw increased market penetration in the quarter.

Zacks Consensus Estimates Jump

Since the earnings report, analysts have moved to raise estimates on fiscal 2011.

The Zacks Consensus jumped by 19 cents to $1.09 in the last month as 2 out of the 3 estimates moved higher during that time.

The company only made 41 cents in fiscal 2010, so that would be earnings per share growth of 165.9%.

Value Fundamentals

Measurement Specialties has solid value characteristics.

Its forward P/E is 13.4, which is under the 15 I use as a cut-off for “value” stocks. Yes, it’s not the cheapest stock around, but compared to its industry, which is trading at 16.2x forward earnings, it is a bargain.

Its price-to-book ratio is also on the low side at 1.3, which beats its industry at 1.7.

The company has a stable 5-year average return on equity (ROE) of 10.8%.

Measurement Specialties is a Zacks #1 Rank (strong buy) stock.

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