Call of the Week: Making Sense of Measurement

Robert Maltbie |

For this week's best call, we at Singular Research took a look at Measurement Specialties, Inc. (NASDAQ:MEAS), a global designer and manufacturer of sensors and sensor-based systems. The company serves various key markets such as automobiles, consumer products, aerospace and defense, heavy equipment and medical. Measurement Specialties announces their Q3 earnings next week, but provided an updated guidance earlier this month with expected sales of about $76 million for the quarter. While the sales projection is below our prior forecast, the book-to-bill ratio for the quarter recovered to a very strong 1.07 from the 0.97 ratio in Q2:12.

Frank DiLorenzo, Singular's analyst covering the company, lowered our earnings per share expectations to $0.36 from $0.50, and full year to $1.72 from $1.97. However, while Q2 of 2012 was disappointing and Q3 will show some relative weakness, the strong uptick in the book-to-bill ratio for the third quarter bodes well for the fourth quarter. Therefore, we continue to expect solid growth for 2013.

Singular has a 12-month target price of $45 for Measurement Specialties, which represents an upside potential of about 38 percent. Our discounted cash flow model assumptions include a weighed average cost of capital of 8.6 percent, annualized operating income growth of 10 percent through full-year 2014, return on capital of 10 percent and terminal growth of 3 percent.

Disclosures: To read Singular Research’s important disclosures, click here.

Singular Research

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
ATHN athenahealth Inc. 97.28 1.30 1.35 606,333

Comments

Emerging Growth

H-Source Holdings Ltd.

H-Source Holdings Inc. is a technology company operating within the healthcare industry through its subsidiary, H-Source, Inc. The Company has developed a transaction platform that provides a private, secure and…

Private Markets

Snapchat

Snapchat is the fastest way to share a moment with friends. The mobile app, allows users to not only share photos with friends but also control how long they can…

MyForce, Inc.

As parents, we constantly worry about the safety of our loved ones. The media bombards us with incidents from across the nation school shootings, frequent assaults on campuses, and crimes…