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Vishay Intertechnology makes discrete semiconductors and other electronic components. The company's products are used in many industries including telecom, aerospace, medical, and industrial.
On May 5 Vishay reported first quarter results that included a $34 million sequential increase in revenues, to $641 million. On a year-over-year basis it was a 42% pop.
Net income came in at over $45 million, which is up from a $29 million loss one year ago. Earnings per share broke down to 24 cents, 2 cents higher than expected and up from an 8 cent loss last year.
Lean and Mean
Vishay's President said the company has rounded out a tough 3-year period. The struggles have left the Vishay "re-focused on profitability", which should lead to record highs.
Guidance often trumps the bottom-line results, which makes sense given that the market is forward looking. You don't buy the past earnings; you are buying the future earnings potential. This is especially true in uncertain times, so the bullish comments are a great sign for Vishay.
After the news, all 5 covering analysts raised their projections. The Zacks Consensus Estimate for full-year 2010 is up 19 cents to $1.08.
Projections for 2011 are averaging $1.17, up 17 cents for the Zacks #1 Rank (Strong Buy). These growth rates are exponential given the 2 cents earned in 2009.
Shares are on Sale
Even after the third consecutive earnings surprise, bullish comments and massive growth projections, shares are still trading at just 8 times 2010 earnings.
Vishay's expected growth is a bargain, with a PEG Ration of 0.7. VSH has a price to book of only 1.1, while its peers average about 1.3 times.
Shares of VSH took a hit after the earnings news and even harder on the "flash crash" the following day. The stock is showing signs of stabilizing and if we get a MACD crossover, it will show momentum is back on our side.
Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service
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