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Analyst Blog

On Mar 12, Zacks Investment Research upgraded Orbit International Corp.(ORBT)  to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Consistent performance from this customized electric equipment manufacturer and strong fourth quarter 2012 results sparked upward earnings estimate revisions. Moreover, this company delivered positive earnings surprises in the last three quarters with an average beat of 121.3%.

The electric equipment manufacturer reported fourth quarter 2012 results on Mar 7. Non-GAAP earnings per share of 24 cents per share surpassed the Zacks Consensus Estimate by 71.43% and the year-ago figure of 21 cent by 14.3%.

The cost-saving initiative of Orbit International yielded positive results and the company was able to lower its selling, general and administrative expenses in the fourth quarter by 9.8% y/y to $2.3 million.

The company has a healthy financial position with its current ratio at the end of Dec 2012 at 3.4.

The uncertainty over the US defense budget and sequestration might impact the business of Orbit International, as the company supplies customized electronic components and subsystems for military and nonmilitary government applications.

Orbit International exited 2012 with a backlog of $15.9 million, increasing $0.4 million year over year from $15.5 million at the end of the Dec 31, 2011.

The Zacks Consensus Estimate for 2013 moved higher by 67.74% to 52 cents per share over the last 60 days, which reflects year-over-year growth of 26.83%. The Zacks Consensus Estimate for 2014 increased 13.46% y/y to 59 cents per share.

Other Stocks to Consider

Other companies performing well in this sector are Active Power Inc. (ACPW), InvenSense, Inc. (INVN - Snapshot Report) and LightPath Technologies, Inc. (LPTH). All of them presently carry a Zacks Rank # 2 (Buy).

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