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Analyst Blog

On Oct 10, Zacks Investment Research upgraded Aeroflex Holding Corp. to a Zacks #1 (Strong Buy).

Why the Upgrade?

Aeroflex has been witnessing rising earnings estimates since the last one month on the back of strong fourth-quarter fiscal 2013 results. Moreover, this well-known provider of microelectric components delivered positive earnings surprises in 3 of the last 4 quarters with an average earnings beat of 25.56%.

Aeroflex reported fourth-quarter and fiscal 2013 (ended Jun 30) results on Aug 15. Non-GAAP earnings per share (EPS) for the fourth quarter came in at 27 cents, surpassing the Zacks Consensus Estimate and the year-ago figure of 23 cents by 17.4%.

Earnings were primarily aided by strong performance in the company’s core business, which includes commercial, aerospace and defense products. Moreover, the company is undertaking significant restructuring and consolidating activities in its ATS AVComm and Wireless businesses. These activities are expected to drive growth and profitability, going forward.

Furthermore, despite generating a GAAP EPS loss of 96 cents during the last reported quarter, the company generated positive cash flow from operating activities, which will enable it to reduce its current debt.

The Zacks Consensus Estimate for fiscal 2014 increased 17.5% to 67 cents as most of the estimates had an upward revision over the last 30 days.

Other Stocks to Consider

The following business service firms are also performing well and have a favorable Zacks Rank as well.

1)      Advanced Micro Devices, Inc. (AMD - Analyst Report) with a Zacks Rank #1 (Strong Buy)

2)      Cirrus Logic Inc. (CRUS - Snapshot Report) with a Zacks Rank #1 (Strong Buy)

3)      Freescale Semiconductor, Ltd. (FSL - Snapshot Report) with a Zacks Rank #1 (Strong Buy)

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