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M-tron (MPTI) Hits 52-Week High: Here's What's Driving It
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M-tron Industries, Inc. (MPTI - Free Report) reached a new 52-week high of $41.62 on Jan 3. The stock pulled back to end the trading session at $36.23, down 1.5% from the previous day’s closing price of $36.79.
This currently Zacks Rank #1 (Strong Buy) company’s shares have surged 236.9% in the past six months, outperforming the Zacks Engineering - R and D Services industry’s 3.8% growth, the Zacks Construction sector’s 13.2% increase and the S&P 500 Index’s 5.7% rise.
The company is benefiting from increased customer demand, especially for defense products despite lingering supply-chain constraints, and diverse end- markets. The advance order phenomenon is driving the backlog of the company, and thus, the business volume. The separation of the company from The LGL Group, Inc. has encouraged its ability to facilitate strategic plans and fueled growth prospects.
Image Source: Zacks Investment Research
The company’s earnings estimate for 2023 has moved north to $1.72 per share from $1.17 in the past 60 days. Furthermore, the company reported an earnings beat in two of the trailing four quarters with an earnings surprise of 35.6%, on average. The stock portrays a positive trend, indicating robust fundamentals and elevating the expectation of an outperformance in the near term, despite the uncertain economic scenario.
Factors Making the Stock Attractive
Growing Backlog: M-tron witnessed consistent backlog growth since the beginning of 2023, thanks to an increase in defense product orders. As of Sep 30, 2023, the company’s backlog was $50.3 million, up 14.1% year over year attributable to customers’ motivation to order in advance to secure product deliveries for their production requirements.
Diverse End Markets: MPTI is thriving despite the uncertain economic scenario because of its diversified end markets, which include avionics, defense and aerospace, space and SATCOM along with instrumentation, industry and computing. Per MPTI’s investor update, among the given end markets, defense and aerospace, and avionics are the main revenue contributors with a hold of 58% and 21%, respectively, of total revenues (as of Sep 30, 2023).
In the first nine months of 2023, the company’s revenues grew 31.2% from the year-ago period's level, driven by the recovering avionics market and strong defense product shipments. The company believes that the growing trends in the end markets position it well for long-term success.
Higher ROE: M-tron’s trailing 12-month ROE is 22.9%, higher than the industry’s 16.3%. This implies that the company is getting less efficient at creating profits and increasing shareholders’ value with respect to its industry.
Strategic Separation Move: On Oct 7, 2022, M-tron announced its official separation from The LGL Group, Inc., thus becoming the sole publicly traded company. This strategic move became a growth driver for the company, helping it to efficiently allocate its resources. The company’s ability to tailor its strategic plans and growth opportunities, along with the flexibility to use its stock as currency for incentive compensation and potential acquisitions, has increased its room to grow in the everchanging economy.
Other Key Picks
Here are some other top-ranked stocks from the same sector.
It has a trailing four-quarter earnings surprise of 37.5%, on average. Shares of FLR have increased 15.4% in the past year. The Zacks Consensus Estimate for FLR’s 2023 sales and earnings per share (EPS) indicates an improvement of 12.4% and 197.6%, respectively, from the prior-year levels.
Martin Marietta Materials, Inc. (MLM - Free Report) currently sports a Zacks Rank of 1. MLM delivered a trailing four-quarter average earnings surprise of 37.3%. The stock has risen 43.2% in the past year.
The Zacks Consensus Estimate for MLM’s 2023 sales and EPS indicates growth of 19% and 52.9%, respectively, from the year-ago levels.
Taylor Morrison Home Corporation (TMHC - Free Report) currently sports a Zacks Rank of 1. TMHC delivered a trailing four-quarter average earnings surprise of 17.5%. The stock has risen 58.6% in the past year.
The Zacks Consensus Estimate for TMHC’s 2023 sales and EPS indicates a decline of 11.8% and 23.6%, respectively, from the year-ago levels.
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M-tron (MPTI) Hits 52-Week High: Here's What's Driving It
M-tron Industries, Inc. (MPTI - Free Report) reached a new 52-week high of $41.62 on Jan 3. The stock pulled back to end the trading session at $36.23, down 1.5% from the previous day’s closing price of $36.79.
This currently Zacks Rank #1 (Strong Buy) company’s shares have surged 236.9% in the past six months, outperforming the Zacks Engineering - R and D Services industry’s 3.8% growth, the Zacks Construction sector’s 13.2% increase and the S&P 500 Index’s 5.7% rise.
The company is benefiting from increased customer demand, especially for defense products despite lingering supply-chain constraints, and diverse end- markets. The advance order phenomenon is driving the backlog of the company, and thus, the business volume. The separation of the company from The LGL Group, Inc. has encouraged its ability to facilitate strategic plans and fueled growth prospects.
Image Source: Zacks Investment Research
The company’s earnings estimate for 2023 has moved north to $1.72 per share from $1.17 in the past 60 days. Furthermore, the company reported an earnings beat in two of the trailing four quarters with an earnings surprise of 35.6%, on average. The stock portrays a positive trend, indicating robust fundamentals and elevating the expectation of an outperformance in the near term, despite the uncertain economic scenario.
Factors Making the Stock Attractive
Growing Backlog: M-tron witnessed consistent backlog growth since the beginning of 2023, thanks to an increase in defense product orders. As of Sep 30, 2023, the company’s backlog was $50.3 million, up 14.1% year over year attributable to customers’ motivation to order in advance to secure product deliveries for their production requirements.
Diverse End Markets: MPTI is thriving despite the uncertain economic scenario because of its diversified end markets, which include avionics, defense and aerospace, space and SATCOM along with instrumentation, industry and computing. Per MPTI’s investor update, among the given end markets, defense and aerospace, and avionics are the main revenue contributors with a hold of 58% and 21%, respectively, of total revenues (as of Sep 30, 2023).
In the first nine months of 2023, the company’s revenues grew 31.2% from the year-ago period's level, driven by the recovering avionics market and strong defense product shipments. The company believes that the growing trends in the end markets position it well for long-term success.
Higher ROE: M-tron’s trailing 12-month ROE is 22.9%, higher than the industry’s 16.3%. This implies that the company is getting less efficient at creating profits and increasing shareholders’ value with respect to its industry.
Strategic Separation Move: On Oct 7, 2022, M-tron announced its official separation from The LGL Group, Inc., thus becoming the sole publicly traded company. This strategic move became a growth driver for the company, helping it to efficiently allocate its resources. The company’s ability to tailor its strategic plans and growth opportunities, along with the flexibility to use its stock as currency for incentive compensation and potential acquisitions, has increased its room to grow in the everchanging economy.
Other Key Picks
Here are some other top-ranked stocks from the same sector.
Fluor Corporation (FLR - Free Report) presently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
It has a trailing four-quarter earnings surprise of 37.5%, on average. Shares of FLR have increased 15.4% in the past year. The Zacks Consensus Estimate for FLR’s 2023 sales and earnings per share (EPS) indicates an improvement of 12.4% and 197.6%, respectively, from the prior-year levels.
Martin Marietta Materials, Inc. (MLM - Free Report) currently sports a Zacks Rank of 1. MLM delivered a trailing four-quarter average earnings surprise of 37.3%. The stock has risen 43.2% in the past year.
The Zacks Consensus Estimate for MLM’s 2023 sales and EPS indicates growth of 19% and 52.9%, respectively, from the year-ago levels.
Taylor Morrison Home Corporation (TMHC - Free Report) currently sports a Zacks Rank of 1. TMHC delivered a trailing four-quarter average earnings surprise of 17.5%. The stock has risen 58.6% in the past year.
The Zacks Consensus Estimate for TMHC’s 2023 sales and EPS indicates a decline of 11.8% and 23.6%, respectively, from the year-ago levels.