JACO, excerpt from a post on Lizard King's trading swamp board on AOL from Lizardking
<<This company has excellent canslim #s, and the beauty of this one is that next Q it is set up for a big blow out due to the comparisons of (-0.12) eps and 36.3 in revs. The estimate for 2001 is $1.95, which isn't even 10x eps.
03:13pm EDT 18-Apr-00 Tucker Anthony Cleary Gull (Robert Damron 414-291-4522)
JACO-"blow Out" Quarter; Jacking Up Estimates; "Table Pounding Buy;" Raising...
Jaco Electronics, Inc. (JACO/NASDAQ: $11 1/4)
"Blow Out" Quarter; Jacking Up Estimates; "Table Pounding Buy"; Raising Price
Target from $17 To $22
Rating: #1-Strong Buy April 18, 2000
Market Cap: $44 Mil. Robert C. Damron 414-291-4522
52-Week Range Shares Out. Avg. Daily Vol. 3-5 Yr. Est. EPS Growth
$15-3 3.9 Mil. 52,200 15%
Dividend/ Insiders Book ROE Debt Total Revenue
Yield Own Value (LTM) Ratio (LTM)
Nil 21% $10.33 11% 36% $182 Mil.
EPS 1Q 2Q 3Q 4Q FY-New P/E FY-Old
Jun-99A $(0.06) $(0.02) $0.02 $(0.12) $(0.18) N.M. -
Jun-00E $0.06A $0.24A $0.45A $0.50 $1.25 9.0x $1.00
Jun-01E $0.45 $0.46 $0.49 $0.55 $1.95 5.8x $1.40
Key Points
* "Blow Out" Quarter: After raising our estimates three times during the
quarter, Jaco still blew through our $0.34 estimate and reported Q3-00 EPS of
$0.45 vs. $0.02 last year. Additionally, the company almost doubled the prior
quarter EPS of $0.24. Sales increased 43% to $51.7 million. The growth was
driven by strong demand for semiconductors, passive components, and flat panel
displays. Because demand exceeds supply for most of these products, pricing and
margins are also improving. Gross margins increased to 23.2% vs. 19.3% last
year, and with leverage of the infrastructure, operating margins increased to
6.4% vs. 1.3% last year. Finally, the balance sheet remains strong with a debt
ratio of 37%.
* "Jacking Up" Estimates; Reiterate #1-Strong Buy Rating; Raising Price Target
From $17 To $22: To account for the better than expected Q3 results and a strong
outlook, we are raising our FY-00E from $1.00 to $1.25, including a Q4E of
$0.50. We are also raising our FY-01E from $1.40 to $1.95. One of the key
drivers of the company's growth during the quarter and going forward is the flat
panel display business. This segment was up 100% from last year and now
represents 10% of sales. As one of the industry's top integrators of flat panel
displays at the OEM level, the company has won customers in the airline,
medical instruments, auto, and electronic voting equipment industries. More new
customers are expected to be added during calendar year 2000. Despite the
fantastic quarterly results and higher estimates, the stock remains cheap
trading near book value of $10.33 and under 6x our FY-01E. Using a mid-range
historical multiple of 11-12x our FY-01E results in a $22 price target over the
next six-twelve months. We, therefore, reiterate our #1-Strong Buy rating. |
