|Written by GSCR Staff|
|Monday, 05 November 2012 12:36|
When does a company’s stock rise after it reports poor revenue results, over $40M in writedowns, nearly $2M for legal expenses related to the indictment of employees in a foreign subsidiary, and headcount reductions, a reduction in business outlook (mainly revenue) in general?
When the stock is Orbotech Ltd. (NASDAQ – ORBK - $8.47). Long a favorite of mine, and a major institutional small cap value holding, ORBK has been at the cutting edge of the electronics industry supply chain, as an innovator of enabling technologies used in the manufacture of the world’s most sophisticated consumer and industrial products, for over 30 years. The Company is a leading provider of yield-enhancing and production solutions, primarily for manufacturers of printed circuit boards, flat panel displays and other electronic components; and today, virtually every electronic device is produced using Orbotech technology. The Company also applies its core expertise and resources in other advanced technology areas, including character recognition for check and forms processing and solar photovoltaic manufacturing.
We have not performed any meaningful financial forecasting yet today, but suffice it to say that the company’s fundamentals and performance reflect the fact that investors believe that the stock, which has had a rough year, may finally have bottomed.
Of course it doesn’t hurt that the Company announced a $30M stock buyback.
We will have more info as we go forward but it could be a candidate for a bounce early next year. The stock is trading around 1x sales (2012) and at this time we believe it will surely be profitable next year. For long term investors, we could see ORBK at $11-12 a year from now.
Here is a link to the Company’s press release:
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