Sypris Solutions Inc.
) delivered a positive earnings surprise of 66.7% in the second
quarter of 2012. This provider of outsourced manufacturing and
electronics services achieved Zacks #1 Rank (Strong Buy) status on
September 5. Furthermore, a forward price-to-earnings (P/E)
multiple of just 8.9 and price-to-sales (P/S) multiple as low as
0.4 make it a true value pick.
Sypris Crushes Q2 Estimates
Sypris reported strong second quarter 2012 results on August 7,
including earnings of 25 cents per share that exceeded the Zacks
Consensus Estimate by 10 cents. The better-than-expected earnings
were primarily driven by strong revenue growth and margin
Revenue jumped 16.3% from the prior-year quarter to $98.9 million,
primarily driven by a strong performance in the Industrial Group
segment (up 20.3%). Gross profit expanded 390 basis points to 13.4%
driven by productivity improvements. Sypris reported operating
income of $4.5 million compared with $0.2 million in the prior-year
quarter, driven by higher revenue and gross profit base.
Earnings Momentum on the Rise
Earnings estimates moved higher over the last 30 days. For 2012,
the Zacks Consensus Estimate jumped 27% to 80 cents, representing a
367.65% year-over-year growth in earnings. For 2013, the Zacks
Consensus Estimate of 84 cents improved 20%, reflecting a 5.0%
year-over-year growth in earnings.
Valuation Continues to Impress
In addition to low P/E and P/S multiples, the stock looks
attractive with respect to a price-to-book (P/B) multiple of just
2.05. A P/E below 15.0, a P/S ratio less than 1.0 and a P/B ratio
under 3.0 generally suggests a value stock. Moreover, Sypris'
Return on Equity (ROE) of 16.6% is much higher than the 8.5% of the
Louisville, Kentucky-based Sypris Inc. was incorporated in 1997 and
has market capital of $142.1 million. Sypris' Industrial
Manufacturing Group (Industrial Group) supplies forged and machine
components. Its main customers are Meritor Inc. (
) and Dana Holding Corp (
The Aerospace & Defense Electronics Group (Electronics Group)
provides IT security solutions to different government agencies all
over the world. Sypris Inc. also provides Electronic Manufacturing
services to companies such as Lockheed Martin Corp. (
) and Northrop Grumman Corp. (
SYPRIS SOLUTION (SYPR): Free Stock Analysis
To read this article on Zacks.com click here.