Camtek (CAMT) is a Zacks Rank #5 (Strong Sell) despite recently beating the Zacks Consensus Estimate. The stock has a Zacks Style Score for Value of F and an A for Growth. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Description
Camtek Ltd. engages in the business of developing and manufacturing high-end inspection and metrology equipment for the semiconductor industry. The firm is also involved in inspecting integrated circuits and measuring its features on wafers throughout the production process of semiconductor devices, covering the front and mid-end and up to the beginning of assembly. The company was founded on October 21, 1987 and is headquartered in Migdal HaEmek, Israel.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case Camtek (CAMT) I see the company has beaten the Zacks Consensus Estimate in each of the last four quarters. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
The most recent quarter saw the company report EPS of $0.82 when the consensus was calling for $0.80.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For Camtek (CAMT) I see annual estimates for next year moving lower of late.
The current fiscal year consensus number has improved from $3.18 to $3.21 over the last 60 days.
The next fiscal year has moved from $3.52 to $3.35 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a lot of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
