Ultratech, Inc. (UTEK - Snapshot Report)
is a Zacks #1 Rank (Strong Buy) and has consistently beat expectations. As a result, the stock performs very well following earnings.
Ultratech, Inc. develops, manufactures, and markets photolithography and laser thermal processing equipment. It supplies step-and-repeat photolithography systems based on one-to-one imaging technology to semiconductor device manufacturers for applications involving line geometries of 0.75 microns or greater and to nanotechnology manufacturers.
Earnings Surprises Streak
UTEK has posted results ahead of expectations in five straight quarters, all of which led to stock price appreciation. The beats in each of the last three quarters were the slimmest of beats, being $0.01 each. Those same one penny beats led to price movements of 3%, 5% and 8%. Some pennies carry more weight than others.
Even when the company just meets expectations, as they did in the September 2010 quarter, the stock moves higher. On that particular instance the stock moved higher by 8%. The best move from earnings came in the June 2010 quarter when the stock advanced by 12.5%.
UTEK Reported Earnings
On January 26, 2012 the company reported revenue of $56.1 million up from 43.6 million in the year ago period. In addition, earnings per share came in at $0.42 up from $0.25 posted a year ago.
UTEK has an interesting valuation picture. On terms of PE, the company trades at a premium to the industry average for both trailing and forward multiples. On the more conservative measure of price to book, the company trades at a sizeable discount to the industry average. The volatile price to sales metric of 3.5x for UTEK is a discount to the industry average of nearly 5x. There is certainly room for expansion for that final multiple.
The chart for UTEK shows a bottoming in mid-October and a strong rally thereafter. With the earnings report behind the stock, look for the post earnings drift to help push UTEK higher. UTEK is a Zacks #1 Rank (Strong Buy).
Brian Bolan is the Aggressive Growth Stock Strategist
Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor