ROFIN-SINAR - Aggressive Growth

ROFIN-SINAR (RSTI) has a growing backlog that should carry over to a strong year. The company is coming off of its fifth earning surprise and this Zacks #1 Rank (Strong Buy) is almost back to its pre-recession operating margins.

Company Description

ROFIN-SINAR makes industrial lasers for more than 4,000 customers around the world.

Big Quarter

On Nov 5 ROFIN-SINAR reported fourth-quarter results that included a 133% jump in EPS, to 42 cents. This was 7 cents ahead of the Zacks Consensus Estimate. Earnings for the year more than tripled to $1.02.

Sales for the quarter were up 37% to $124.4 million. ROFIN-SINAR management said that the improvements came on strength in the machine tool, semiconductor and electronics industries. Margins are also improving and are nearing the pre-recession peak.

Heading into the new year, ROFIN-SINAR has a backlog of almost $139 million, which is up 73% since last year.

Bullish Revisions

The Zacks Consensus Estimate for fiscal 2011 is up 22 cents, to $1.58. Next year's forecasts are averaging $1.99, which is up 28 cents in the past months.

Given the $1.04 ROFIN-SINAR earned in fiscal 2010, which just ended, estimate growth rates are 52% for this year and another 26% next year.

Industry Comparison

ROFIN-SINAR is the top rated company in its industry, beating out 11 other similar companies. As a whole, the industry ranks 49th out of 264.

The average company in the industry operates at a loss; ROFIN-SINAR has a net profit margin of 7.0%. Currently the company has an ROE of 7.3% while its peers average negative 5.7%.

The Chart

Shares of RSTI saw a nice bump on the earnings surprise, but that evaporated quickly. The stock trended sideways until a recent move has pushed it to pressure that 52-week high.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service
 
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