Teledyne Technologies (NYSE: TDY) manufactures
sophisticated electronic components, instruments and communications products. These include defense electronics, data acquisition and communications equipment for airlines and business aircraft; monitoring and control instruments for industrial and environmental applications; and subsystems for wireless and satellite communications. The firm also provides systems engineering and information technology services for defense and space applications; manufactures general aviation and missile engines; and makes on-site gas and power generation systems. Clients include Boeing (NYSE: BA), NASA and the U.S. Air Force. Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC) and Raytheon (NYSE: RTN) are competitors.
The company pleased investors last week, when it announced Q1 EPS of 77 cents and revenues of $451.8 million. Analysts had been looking for 66 cents and $424.6 million. The CEO noted that it was the twenty-fifth consecutive quarter of year-over-year earnings growth. Management also guided Q2 EPS to 72-74 cents (74 cent consensus) and FY08 EPS to $2.98-$3.06 ($2.93 consensus).
TDY shares
popped on the news and are now forming a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the shares with two "strong buys", three "buys" and one "underperform". Analysts see a 15% average annual growth rate, through the next five years. The TDY P/E ratio (19.67), Price to Sales ratio (1.20), Price to Book ratio (3.59), Price to Cash Flow ratio (14.13), Sales Growth rate (17.17%) and EPS Growth rate (35.09%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 86% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $42.86 and $59.18. A stop-loss of $50.90 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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