A quick search for “UCTT Bull of the Day” will generate a list of three times in the last seven months. The first instance was back in November 2016, when Brian Hamilton wrote about the stock seeing estimates double, which was the primary reason it was the Bull of the Day. The two other times I wrote about the stock, first on January 25 and then again on March 27. Suffice it to say, this stock has been on the radar screen for some time, but the fact is that earnings estimates have done nothing but move higher. The Zacks Rank is designed to help investors find stocks that see earnings estimates move higher and those that believe in fundamentals know that earnings are a primary driver of stock prices. On November 3, 2016 the stock was $8.52 and by January 25, it had increased to $12.62. On March 27 UCTT was $15.65 and as I write this the stock is again testing new highs at $21.50. If you see a clear pattern here, you might want to skip to bottom of this article to see the best trade ideas from Zacks. Description Ultra Clean Holdings ( UCTT - Free Report) develops critical systems and subsystems for the semiconductor capital equipment, flat panel, medical, energy and research industries. Ultra Clean is headquartered in Hayward, California. Recent Earnings On April 26 the company posted a solid beat and raise quarter. I love to see beat and raise quarters as it is like getting six months of good news in one instant. The company posted earnings of $0.47 per share which was $0.05 better than the Wall Street consensus estimate. Revenues of $204.6M were firmly ahead of the $192.6M consensus estimate. That alone is a solid report, but the real juice is yet to come. The company then guided the next quarter to EPS of $0.49-$0.55, and that is well ahead of the consensus of $0.34. That is a major increase in earnings, and following the analysts increase in estimates the stock moved to a Zacks Rank #1 (Strong Buy). Revenue guidance was $210M to $220M compared to the consensus of $186.9M. Aggressive growth investors love to revenue guidance coming in higher than expected as higher sales are among the biggest drivers of higher earnings. Follow Brian Bolan on Twitter: @BBolan1 Valuation In the March 27 Bull of the Day, I noted the valuation was terrific when the stock was $15.65. Now with the stock pushing to new all time highs over $21.50, I see the stock with an even better valuation. On March 27, the forward multiple was 13x, as I see it while writing this article it is down to 12.8x. This clearly tells me that the multiple for this stock has remained the same as the company has continued to execute. As margins expand, the potential for multiple expansion increases. As the market begins to appreciate the execution that this company has shown, the multiple will move higher and that will drive the stock to much higher levels.
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