Quanta Services (PWR) reported fourth-quarter earnings per share of $0.45 yesterday morning, when the market expected $0.44. Revenue of $2.48 billion surpassed the consensus estimate of $2.34 billion.
CEO Duke Austin stated, “Quanta ended the year strong, with record annual revenues, backlog and adjusted diluted earnings per share. More importantly, we expect our momentum to carry into 2018 and provide us with another opportunity to achieve record revenues, backlog and adjusted diluted earnings per share.” Mr. Austin also expects margin improvement in 2018. Quanta repurchased another $50 million of stock during the quarter.
Quanta Services provides specialized infrastructure and network services to the electric power, oil and natural gas industries. PWR is an undervalued aggressive growth stock. The stock recently began to rebound from its February lows, and then rose another 3% yesterday on the good earnings report. There’s approximately 12% upside as the stock retraces its January high of 40. I expect additional capital gains thereafter. Buy PWR now. Strong Buy.
Universal Electronics (UEIC) reported fourth-quarter non-GAAP EPS of $0.60 yesterday afternoon, on target with the Thomson Reuters consensus earnings estimate. Revenue of $181.2 million beat the consensus estimate of $175.4 million, and the company also guided first-quarter revenue estimates above the consensus. The company is focused on both its global rollout of new products and services and on increasing gross margins.
Universal Electronics is the worldwide leader in sensing and control technologies for the smart home. UEIC is an undervalued micro-cap growth stock, with minimal debt on the balance sheet. Micro-cap stocks are volatile and their price fluctuations are often illogical. The good news is that the stock opened up about 18% today.
Over time, I expect the market to not only embrace UEIC, but I also believe there’s a strong likelihood that the company could be an acquisition target. One strong hint of that potential is that Comcast Corp. (CMCSA) entered into a warrants agreement with Universal Electronics back in 2016.
There’s upside price resistance at 54 and 66. We’ll probably see a pullback in the coming days, and that would be a great entry point.Strong Buy.