Intevac, Inc. (IVAC - Snapshot Report) is trading at a great value with nice growth projections, but you will need patience to buy this company.
Intevac operates in two segments. The equipment business makes manufacturing systems for the hard-drive industry as well as the photovoltaic and semiconductor industry. The Intevec Photonics makes imaging and vision products for the military, medical and other industries.
A Surprise Profit
Analysts were expecting Intevac to report a 4 cent per share loss on May 3. The company ended up profiting 6 cents, continuing the more than 5-year streak of earnings surprises.
Intevac's backlog jumped to a record level and revenues soared 169% to $33.1 million. This led to a $1.4 million profit, up from the almost $6 million loss one year ago.
After the release analysts drastically raised their full-year projections. The 2010 Zacks Consensus Estimate is now $1.15, up 17 cents in the past week and from 66 cents 3 months ago.
The average estimate for 2011 is now $1.24, up from $1.00 prior to the earnings news. Compare these levels to a 46 cent loss in 2009 and you have a dramatic turn around.
Despite all of the good news, Intevac is trading at 10 times forward earnings. The growth rates that come along with the resurrected earnings growth are a value as well; the PEG ratio is only 0.7.
The price-to-book ratio of 1.5 should keep some traditional value investors interested as well.
Intevac is the top ranked company amongst its peers in the electronic manufacturing machinery segment. The industry as a whole is in the top 10 percentile amongst the 264 industry ranked by Zacks.
Here is the catch, the chart is brutal. However, if you wait to see shares regain their footing, which could be near either of the recent lows, it could make a great entry point. This is not for the faint of heart or the impatient.