Matrix Service Company

Matrix Service Company's (MTRX - Snapshot Report) share price appears to have found a short-term bottom, rebounding from a key level and climbing more than 50% in the last 3 weeks. In the meantime, estimates have held in higher ground, creating a value opportunity for a stock operating in a growth sector.

Company Description

Matrix Service Company provides construction, repair and maintenance services to the energy industry. The company was founded in 1989, has a market cap of $301 million and is headquartered in Tulsa, Oklahoma.

First-Quarter Results

Matrix reported awesome second-quarter results on Oct 2 that demonstrate the strong demand energy services companies continue to enjoy.

Revenue was up 16% from last year to $186.7 million. Net income increased 50% to $9.5 million. This produced earnings of 36 cents per share, 6 cents ahead of estimates.

Consistent Earnings

With oil prices remaining in elevated territory, Matrix has surprised and beaten estimates in each of the last 2 quarters.

A Strategic Acquisition

During the call Matrix also announced that it plans to buy engineering and construction resources, as well as acquire 70 employees from Chicago Bridge & Iron Co. The deal will provide Matrix with an additional backlog of $20 million in cost-plus contracts and is expected to close in the second quarter of 2009.

Guidance and Estimates

After the solid quarter, Matrix reaffirmed its full-year earnings guidance between $1.35 and $1.60 per share.

Analysts are bullish on the longer-term prospects of Matrix, with the next-year estimate pegged at $1.76 per share, a 16% earnings growth projection.

The Chart

After trading lower over the last few months with crude, shares of MTRX recently found a short-term bottom and began to rebound. With this stock trading lower and estimates holding in higher ground, this provides a unique value opportunity for a stock operating in a high-demand sector.