Cognex Corporation (NASDAQ: CGNX) provides
machine vision computer systems that automate a range of manufacturing processes. Essentially, the systems link to video cameras and serve as eyes where human vision is insufficient. The firm's Modular Vision Systems automate the manufacture of discrete items (e.g: semiconductor chips) by locating, identifying, inspecting and measuring them during the manufacturing process. Its Surface Inspection Systems monitor the surfaces of materials processed in a continuous fashion (e.g: paper, metal, plastic) for imperfections. Cognex has offices throughout North America, Japan, Europe, Asia and Latin America. Boston Scientific (NYSE: BSX), Ford Motor (NYSE: F) and Sony (NYSE: SNE) are customers.
Cognex pleased investors earlier in the week, when it reported Q1 EPS of 20 cents and revenues of $60.5 million. Analysts had been looking for 17 cents and $59.9 million. Management also guided Q2 EPS to 20-24 cents (20 cent consensus) and Q2 revenues to $65-$68 million ($63.14 million consensus). The firm expects gross margin to remain in the low-70% range.
The CGNX
share price popped on the news and then moved into a bullish "pennant" consolidation pattern. Stocks frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with one "strong buy", four "buys" and two "holds". Analysts see a 24% growth rate, through the next year. The CGNX Price to Book ratio (2.27) and EPS Growth rate (100.00%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 94% 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 $14.67 and $26.45. A stop-loss of $22.00 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.
Entrepreneur's Journal: Key steps for telesales success
The week in preview: Focus returns to earnings: Alcoa, Chevron, Family Dollar
Comfort Zone Investing: Survival of the fittest -- letting some banks fail
Reader Comments (Page 1 of 1)
5-02-2008 @ 9:23PM
Shaun said...
Nice, if it does break resistance of $26 it might be worth getting into.
http://www.stocks-simplified.com