This hardware company topped analysts’ EPS estimates by ten cents in its latest quarter, and seven analysts have raised their earnings forecasts for the company in the past 30 days.
MKS Instruments (MKSI)
From The Investment Letter
I’ve found a mid-cap hardware stock that has two very attractive characteristics. First, it has been doing extremely well these past few years, with annual growth rates over 50%. Second, despite a smartly rising stock price, it still sports a very attractive market multiple of less than 21.
The company is called MKS Instruments (MKSI) and it makes instruments, subsystems and process control solutions that help manufacturers keep a close watch on their production. Picture the precise nature of semiconductor manufacturing. MKS makes the stuff that allows the semiconductor companies to get their job done with a precision that staggers the imagination.
While there are many companies doing a bang-up job in this field, MKS caught my eye because the company has been busy making wise acquisitions and divestitures that are boosting growth and adding to its bottom line. In addition, management has been fanatical about reducing its annual interest expenses as well as cutting its outstanding debt. The combination of repricing its Term Loans and outright debt reduction, has allowed the company to cut its interest expenses in half, saving MKSI $20 million a year.
That may not seem like much, but it helps boost margins. Given the potential growth in sales, these moves help boost an already healthy bottom line.
David C. Jennett, The Investment Letter, P.O. Box 6170, Holliston, MA 01746, 800-542-5018, October 24, 2017