My new/favorite ECM stock, Applied Power (APW):
APW trades should do about $2.30 of EPS this year and trades at $28, so trading at only 12x P/E for a company that has been growing earnings at 25% for the last several years. THere is also about $.65 of Goodwill Ammortization flowing through P&L, so on a cash basis EPS is really ~$3.00, or a P/E of 9x for 25% growth. APW also recently announced a giant deal with Ericcson:
biz.yahoo.com
Very compelling. My opinion.
This is a summary from a recent wall street report:
Executive Summary
* We believe APW, a global leader in the fragmented electronics enclosures
industry, is likely to gain share as OEMs consolidate their supply base,
increase integration requirements and divest manufacturing operations.
* We expect continuing strong cash flows from the Company's Tools and Supplies
and Engineered Solutions divisions.
* In our opinion, shares are extremely undervalued and do not reflect the
significant growth likely in the Company's EMS operations.
* We are establishing FY99 and FY2000 EPS estimates of $2.30 and $2.90. We
expect 20% L-T EPS CAGR. We rate APW a Strong Buy with a 6-month price target
of $46, an 84% premium to current prices.Key Data: 1998 1999 2000
52-Week Range: $40-$20 EPS
Market Cap.(MM): $1,007 Q1 $0.43 A $0.53 A $0.70 E
Shares Out.(MM): 40.4 Q2 $0.41 A $0.48 A $0.71 E
Avg Daily Vol.(K): 380 Q3 $0.48 A $0.60 E $0.74 E
Fiscal Year End: 8/31 Q4 $0.53 E $0.69 E $0.75 E
Year $1.85 $2.30 $2.90
P/E 13.5x 10.8x 8.6x
P/E/G 67.4% 54.2% 43.0%
Total value/EBITDA: 6.5 Revenues
Debt/Total Capital: .55 Q1 $275.4 A $435.6 A $528.6 E
Secular Growth Rate: 20% Q2 $279.4 A $422.0 A $540.4 E
Q3 $303.9 A $470.0 E $560.4 E
Q4 $372.0 A $515.0 E $570.6 E
Year $1,230.7 $1,842.6 $2,220.0
Company Description: Applied Power, a diversified manufacturer with increasingly
profitable operations in Engineered Solutions and Tools and Supplies, has
recently transformed itself into a global leader in the rapidly consolidating,
fast-growing electronics enclosure segment of the Electronics Manufacturing
Services industry. |
