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Technology Stocks : Aeroflex (ARX)
ARX 12.62+4.7%Nov 7 9:30 AM EST
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To: MulhollandDrive who wrote (381)2/5/1998 2:36:00 AM
From: Kerry Lee  Read Replies (2) of 586
 
Thanks for pointing that out BAP. The other factors to consider are:

1)Aeroflex now has 3 bonified WALL STREET analysts covering the stock ( Oppenheimer, Soundview, AG Edwards ) versus only Oppenheimer supporting the stock on that last run. Getting Wall St to notice this Company has been THE biggest hurdle to overcome and it appears that the Story is finally getting noticed. Earnings visibility doesn't hurt either <g>. This is why I am not concerned with any future potential follow-on offerings because in the long run, it is worthwhile to get the analyst coverage. People who whine about dilution are not seeing the forest through the trees. Wall St firms don't work for charity..they're in it for the fees.

2) The Q2 eps estimate was revised upward from 8 cents to 9 cents after the last conference call. They beat the revised Street number by 2 cents, ie 22% above expectations. Does that qualify as a Blow-out quarter? I would be surprised if they don't guide the analyst number up going forward, which would help support a higher market valuation.

3) Business momentum appears to be picking up as evidenced by the $66 million backlog at Dec 31/97, which is a 44% higher order rate versus the same period YA. Perhaps we'll hear about some new customers/orders in the near future???

4) Operating leverage appears on the surface to be accelerating based on the 28% increase in revenues and the corresponding 89% year over year growth in profits. Probably also a function of higher growth rate in higher margin product lines ( 68% growth in microelectronics business unit ).
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