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Aggressive Growth

FEI Company (FEIC - Snapshot Report) is the top rated company its a hot sector after reporting a record quarter. This Zacks #1 Rank (Strong Buy) also has analysts buzzing which keeps pushing its growth rates even higher.

Company Description

FEI Company makes scientific instruments including electron and ion-beam microscopes and tools for nanoscale applications. Its customers are around the world and in industries ranging from data storage to life sciences.

Record-Setting Quarter

On Feb 3 FEI Company reported fourth-quarter results that included records for bookings, revenue and earnings. The top line improved 22% since last year, to $186.1 million. Net income rose 79%, to $21.3 million.

Earnings worked out to $0.52 per share, up from $0.30 and better than the $0.38 analysts were expecting. This marked the third consecutive earnings surprise.

Outlook Spikes

After the fantastic results and subsequent guidance from the company, analysts quickly raised quarterly and full-year estimates. Upward revisions from each of the 6 covering analysts pushed the full-year 2011 Zacks Consensus Estimate to $1.80, from $1.48.

Next year's estimates are up to $2.09, from $1.63. Given earnings per share of $1.18 in 2010, the annual growth rates are expected to be 53% and 16%.

Valuations & Comparison

With a forward P/E of 18 times and PEG ratio near 1.5 times, FEI Company does not exactly scream value. But given that it is one of the smallest companies in the sector at just over $1 billion in market cap, its price to sales is a better measure. At 1.9 times, it is better than all but 1 company in its peer group.

FEI Company is the top rated company in its industry, which has 8 companies. The industry itself is ranked 9th out of 264 on, so FEIC is a hot company in a strong sector.

The Chart

Shares of FEIC popped on the earnings surprise but have settled down since then. The stock has been consolidating for a couple weeks now and should be ready for another move higher.

FEI Company  - ticker FEIC>


Bill Wilton is the Aggressive Growth Stock Strategist for He is also the Editor in charge of the market-beating Zacks Small Cap Trader service

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