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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerAMETEK Inc. (NYSE: AME) manufactures
and markets electronic instruments and electromechanical devices in North America, Europe, Asia and South America. The firm's Electronic Instruments Group makes testing, monitoring and calibration instruments for the aerospace, transportation, research, industrial and power markets. Its Electromechanical Group produces motors, blowers, fans, heat exchangers and connectors for appliance, defense, medical and computer applications. The group also makes industrial specialty metals. General Electric (NYSE: GE) and Agilent Technologies (NYSE: A) are major competitors.
The firm pleased investors last week, when it reported fiscal Q4 EPS of 57 cents and revenues of $583.3 million. Analysts had been looking for 53 cents and $553 million. Management also predicted FY08 EPS of $2.40-$2.45, versus Street consensus of $2.43. Friedman Billings subsequently boosted its rating on the shares to "outperform".
The stock
popped into a bullish "flag" consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers recommend the shares with four "strong buys", three "buys" and three "holds". Analysts expect a 16% average annual growth rate, through the next five years. The AME Price to Book ratio (3.81), Sales Growth rate (21.35%), Operating Margin (18.09%) and Return on Equity (20.66%) compare favorably with industry, sector and S&P 500 averages. Institutions own about 82% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $32.35 and $48.45. A stop-loss of $37.40 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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