FARO Technologies, Inc. is seeing strong demand for its products despite a tough economy. The stock has rebounded strongly from its lows in January, but is still attractively valued at a PEG ratio of 1.1. Earnings estimates for this year have risen nine cents to $1.50 over the past month. All three covering analysts have raised their guidance.
Full Analysis
FARO Technologies, Inc. (FARO), together with its subsidiaries, designs, develops, and manufactures software-based three-dimensional (3D) measurement devices for manufacturing, industrial, building construction, and forensic applications.
The company offers articulated electromechanical measuring devices, such as Faro Arm, a combination of six or seven-axis, instrumented articulated measurement arm, a computer, and software programs; Faro Scan Arm, which provides customers the ability to measure their products without touching them and offers a seven-axis contact/noncontact measurement device with integrated laser scanner; and Faro Gage, an accuracy version of the Faro Arm product.
In mid-February, the company reported strong fourth-quarter results that sailed past expectations. Net income for the fourth quarter was $8.4 million, or 50 cents per share, an increase of $4.7 million, compared to $3.7 million, or 25 cents per share, in the fourth quarter of 2006. Analysts expected 31 cents per share.
Sales for the fourth quarter of 2007 were $59.2 million, an increase of $15.3 million, or 34.9%, from $43.9 million in the fourth quarter of 2006. New order bookings for the fourth quarter of 2007 were $65.4 million, an increase of $15.6 million, or 31.3%, compared to $49.8 million in the year-ago quarter.
"Once again, the FARO team around the world demonstrated its ability to perform," stated Jay Freeland, FARO's President and CEO. "Sales growth for 2007 was above the target range of 20-25% that we have been communicating all year. As always, fourth quarter sales were particularly strong with all three regions growing more than 20%."
"2007 was a tremendous year for FARO combining significant growth with great productivity, several new products and fantastic execution. Although there is clearly increased economic pressure globally, particularly in the U.S., we continue to see strong demand for our products. As such, in 2008 we are maintaining our guidance ranges of approximately 20% - 25% top line growth and gross margin of 58% to 60%," Freeland concluded.
These results have allowed the stock to bounce strongly off of its January lows around $20. FARO has posted an average surprise of 34% over the past four quarters. Earnings estimates for this year have risen nine cents to $1.50 over the past month. All three covering analysts have raised their guidance. The stock is attractively valued at a PEG ratio of 1.1x.
Content Courtesy: Zacks Investment Research
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Thursday, March 06, 2008
FARO - FARO Technologies - posted an average surprise of 34% over the past four quarters
NUS - Nu Skin Enterprises - ROE coming in at 20.12% against the average of just 10.39%
Nu Skin Enterprises, Inc. (NUS) is in the late stages of a restructuring program that has enabled it to pursue new business in the potentially lucrative Chinese markets of Beijing and Shanghai. While this development did slightly dampen its most recent quarterly results with a hefty one-time charge, it also provides the company with a very nice opportunity to cash in on the emerging-market growth cycle.
Full Analysis
Nu Skin Enterprises, Inc. engages in the development and distribution of personal care products and nutritional supplements worldwide. It offers its products primarily under the Nu Skin, Pharmanex, and Big Planet brands. The company sells its products primarily through independent distributors in north Asia, the Americas, south Asia Pacific, and Europe. Nu Skin Enterprises was founded in 1984 and is headquartered in Provo, Utah.
On Feb 6, Nu Skin reported fourth quarter results that were in line with analyst expectations, when considering one-time charges that were levied against the company due to restructuring initiatives. Revenue rose 6% to $306.1 million. Net income totaled $5.9 million, compared to last year's $15.9 million. This produced earnings of 9 cents, which were in line with analyst expectations when considering a one-time earnings hit of 17 cents per share due to the previously mentioned restructuring charges.
The company maintained its 2008 profit target, reiterating that it expects to earn 23 to 25 cents per share on revenue of $281 million to $286 million.
The company announced in January that it received the go-ahead to begin direct selling activities into all districts of Beijing and Shanghai in China, which the company eventually believes could be its largest market.
President and CEO Truman Hunt said that,"during the quarter, we also successfully executed phase two of our restructuring plan, including significant simplification of our operating infrastructure in China. These efforts are targeted to help us achieve our operating margin objective of 10.5 percent for 2008."
"The top-line improvements we are seeing globally, coupled with the aggressive steps we are taking to achieve our operating margin target, give us confidence that 2008 will be a great year," said Hunt. "We expect to improve earnings per share by 35 to 45 percent through increased revenue and improved operating efficiency. Overall, I am very encouraged with the direction of the business," concluded Hunt.
On Feb 19 the company announced that it was bumping its quarterly dividend by a half cent to 11 cents. The dividend is payable to shareholders on record as of Feb 29.
Nu Skin also boasts some nice comparisons to its industry competition, with its ROE coming in at 20.12% against the average of just 10.39%. The company's profit margin stands at 3.78% compared to the industry average of 2.28%.
Content Courtesy: Zacks Investment Research
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DAR - Darling Intl - fourth time in four quarters that the company has either met or beaten analyst estimates by a 35% average
Darling International, Inc. has been quite a growth story for investors over the last couple of years, and that momentum does not appear to be subsiding. The company reported excellent fourth quarter results on Feb 27 that included an impressive 134% jump in earnings to $14.4 million. This upward trend in earnings growth is projected to continue, with current year-earnings pegged at 77 cents per share, which would represent a 37.5% jump from last year.
Full Analysis
Darling International, Inc. (DAR) provides rendering, recycling, and recovery solutions to the food industry primarily in the United States. It has two segments, Rendering and Restaurant Services. It also provides grease trap collection services and sells equipment to restaurants. The company was founded in 1882 and is headquartered in Irving, Texas.
Darling is operating in a fairly unique segment of the market, and is actually the only publicly traded company that engages in its particular line of business. Darling primarily engages in collecting scraps from slaughterhouses, items like skin, brains and other various leftover animal parts, and then uses these components to develop raw materials to be used in such items as pet food and fertilizers. The company has also recently been exploring opportunities to develop exposure in the bio-fuel sector.
This is proving to be a very lucrative and high growth section of the market, as seen by the company's fourth quarter and full-year results, reported on Feb 27.
Revenue for the quarter was $175.4 million, a nice jump from last year's number of $128.1 million. Net income came in at $14.4 million, compared to $6.1 million last year. This produced earnings of 18 cents per share, well ahead of analyst estimates. The company attributed the earnings growth to significantly higher selling prices and a $1.2 million gain under the Alternative Fuel Mixture Credits act.
This marks the fourth time in four quarters that the company has either met or beaten analyst estimates, having done so by an average of three cents, or 35%.
Full-year fiscal 2007 results included 60% growth in revenue to $645.3 million. Income surged ahead to $45.5 million from just $5.1 million last year. Darling CEO Randall Stuewe said that the company believes it has significant momentum going into 2008.
With a solid quarter in the bag and optimistic projections and comments from the company, the analyst community continues to boost estimates. Within the last seven days, two of three covering analysts have increased their current-year estimates, driving the consensus estimate up six cents to its current projection of 77 cents per share.
Darling shares have performed beautifully over the last six years, and in accordance with the excellent fourth quarter results, have recently gotten into an even more bullish mood. Shares are currently advancing along a very nice upward trend line that has been in play since the low from Jan 22.
After establishing a new 52-week high last week, just above $13, shares have now pulled-back some in order to take a little breather. The momentum however is still intact. The upward trend line is still in play, so look for the eventual bounce from this area of support as shares look to once again head higher. This recent dip in prices could be an added bonus for investors to initiate at a discount. The stochastic is providing a very nice signal that this stock is nowhere close to being overbought.
Content Courtesy: Zacks Investment Research
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VCI - Valassis Communications - still trading at cheap valuations
Valassis Communications is finding that, in this economy, consumers are looking to cut coupons now more than ever. The company is well-positioned to provide advertisers, both through newspaper inserts and its new web site devoted to providing on-line deals, with the marketing plan to take advantage of the consumers who want to save money. Valassis beat on estimates by 19.44% in the fourth quarter and yet still trades with a P/E of only 8.48.
Full Analysis
Valassis Communications, Inc. (VCI) is a marketing services company that designs direct mail coupon books, emarketing plans and freestanding advertising inserts with coupons for placement in newspapers. VCI services over 15,000 advertisers.
The company, a Zacks #1 Rank (Strong Buy), recently started RedPlum.com, a web site that delivers coupons and other deals to over 100 million shoppers a week over the Internet.
In Feb 2007, the company acquired direct mail advertising company ADVO, which had 13,000 advertisers. This acquisition provided a big boost to VCI's 2,000 advertiser base.
On Feb 21, the company reported great fourth-quarter earnings which beat consensus estimates by 19.44%. Quarterly profit tripled. Net income rose to $20.6 million, or 43 cents per share, from $6.9 million, or 14 cents per share, in the year-ago period. Analysts' consensus estimates had called for 36 cents per share.
Revenue rose to $661.49 million from $286.37 million.
The company said that cost savings from its ADVO acquisition earlier in the year continued to pay off. Those savings totaled $26 million, better than the $18 million the company earlier forecast for the year.
In response to the earnings surprise, analysts' consensus estimates for the first quarter and full-year 2008 rose in the last 30 days. Consensus estimates rose on average of two cents to 21 cents per share from 19 cents per share.
For the year, three out of five covering analysts raised estimates on average of three cents to $1.29 from $1.26 per share. One analyst also lowered.
Valassis is still trading at cheap valuations. The company has a P/E of only 8.48, well below the industry average of 11.3. Its price-to-book is 2.47.
Content Courtesy: Zacks Investment Research
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