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Aggressive Growth

Newport Corp. (NEWP - Snapshot Report) is projecting record sales for the current year, which has analysts raising estimates.

NEWP is carrying a Zacks #1 Rank (Strong Buy), trades with great valuations and the long-term outlook is fantastic.

Company Description

Newport supplies technology products and systems to the scientific research, aerospace, microelectronics and other highly technical fields. The company’s lasers and optics are just some of the specialized products that go into its customer’s automation, manufacturing and engineering processes.

Sales Increase 42%

On Oct 27 Newport reported third-quarter results that showed a 42% jump in net sales, to just over $125 million. New orders were up 40% during the period.

Net income came in at $12.6 million, which is up from a $3.5 million loss a year ago. Newport's net income for the 9-month period is approaching $26 million, a drastic turn around from the $17.5 million loss they had though 3 quarters in 2009.

Currently the company has a back log of $132 million, up from $95 million a year ago.

Moving Forward

Newport said that thanks to its increasing backlog and order momentum it projects a sales to grow 30% on the year, to a company record.

Analysts like it. After each reporting analyst raised their full-year outlook for this year, the consensus is up 16 cents, to $1.05. Forecasts for 2011 are up 14 cents to $1.21. In 2009 the company made just 20 cents, putting annual growth rates at 424% and 16%, respectively.

Great Valuations

While the PEG ratio seems a bit high, at 1.78, that is the norm for its peer group. However, Newport's price to sales ratio of 1.22 trumps similar companies. The forward P/E is also best in the group, at 14 times.

Newport is the top ranked scientific instrument company on Zacks.com, which has the industry ranked at 23 out of 264.

The Chart

The long-term trend in NEWP is shaping up very nicely. You can see the consistently rising estimates (multi colored lines). Not only are they higher year-over-year but they continue to rise throughout.

Newport Corp - ticker NEWP >
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Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service

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