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Anatomy of Success: IntriCon Corp. (IIN)

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A company’s Zacks Rank is a great indicator of how well it’s expected to perform over the next one to three months. Here at Zacks, we discuss how this ranking tool helps identify the best of the best, as only 5% of the Zacks Rank universe receives the exclusive rating of a #1 (Strong Buy).

Not only does this ranking help identify the most elite stocks, but it also enables you to stay in a particular company while it continues to see price appreciation beyond the three-month horizon.

Below, you’ll find an example that perfectly illustrates how to trade a Zacks Rank #1 stock, and how to ride the wave of earnings estimate revisions for market-beating gains.

IntriCon Corporation

IntriCon designs, develops, engineers, and manufactures microminiaturized medical and electronic products. The company supplies these components, systems, and molded plastic parts primarily to the hearing instrument manufacturing industry, as well as to the computer, government, electronics, telecommunications and medical equipment industries. IntriCon has facilities throughout the United States, Asia, and Europe.

IIN first became a Strong Buy stock back on January 5, most likely due to overarching analyst bullishness as the company headed into its fourth quarter fiscal 2017 earnings report. Shares closed that trading day at $20.25.

The company was given the #1 title once more before reporting Q4 results, on January 26, remaining fairly flat just a few weeks since it was first made a Zacks Rank Strong Buy.

IntriCon performed well in its fiscal 2017 fourth quarter. Earnings of 7 cents beat the Zacks Consensus, while revenues grew 25.2% year-over-year thanks to gains from its largest medical customer and continued traction in value hearing health; full-year revenues of $88.3 million were a record for the medical electronics company, up nearly 30% from 2016. Additionally, Hearing Help Express (HHE) hearing aid orders increased 173% over the prior-year quarter. Gross margin hit 30%.

IIN was made a #1 stock again on Jul 27 after it reported standout second quarter fiscal 2018 earnings results. EPS of 25 cents handily topped the Zacks Consensus Estimate of 10 cents, while revenues of $30 million also beat our estimate; it was another record period for revenues, which surged 33.9% year-over-year. Sales to IntriCon’s largest medical customer rose almost 60% from Q2 2017, while value-based direct-to-end-consumer and indirect-to-end-consumer hearing healthcare revenue increased 45.6% and 16.9%, respectively. Q2 gross margin was 33.1%.

About eight months after becoming a Zacks Rank #1, shares of IIN made a big move, skyrocketing almost 190% to $58.57. IIN is currently a #2 (Buy) on the Zacks Rank.

Here, this table shows the price performance of IIN (in red), as well as the 12-month forward looking EPS estimate (in green), over the past one year. During this stretch, IIN never moved lower than a Zacks Rank #3 (Hold).

By utilizing the Zacks Rank, investors are able to easily identify elite stocks that are best positioned to beat the market on a consistent basis, and how to hold those top stocks as they continue to grow.

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