Aggressive Growth: AVX Corp (AVX)

AVX Corp (AVX) doubled its profits since last year, estimates are heading higher and you can still get shares at a discount.

Company Description

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.

Revenue up 36%

On Jul 28 AVX Corp reported first-quarter revenue of $396.5 million, up 8% sequentially and 36% year-over-year. The gross profit margin improved to 26%, up from 23% last quarter and 19% a year ago.

Net income came in at just over $52 million, or 31 cents per share, up from $46.5 million and 27 cents since last quarter. On a year-over-year basis, net income more than doubled.

The Zacks Consensus Estimate heading into the report was calling for 29 cents, marking the fifth consecutive earnings surprise for AVX Corp.

Estimates Jump

Analysts are all on the same page as each estimate revision since the report was moved higher. The full-year Zacks Consensus Estimate for fiscal 2011 is up 19 cents to $1.31.

Next year’s estimates are now up 18 cents on average, for a mean of $1.32. Given these projections, analysts are expecting 58% earnings growth this year and another 1% next year.

Comparison to Industry

AVX Corp operates with a new profit margin just higher than 12% which is more than double the 5.1% its peers average. The company returns 9.5% on equity, besting its industry average of 6.3%.

Shares are also trading at a discount, with a forward P/E of just 11 times and a PEG ratio of 0.9 times.

The Chart

The stock was already on its way out of a downward trend, but the recent earnings surprise gave it the fuel it needed to continue the climb. Take a look at the chart below.

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