SwingTrade Member Forum

[MikeDDKing]

IECE update (01/30/09)

I believe that IECE is setup for a triple over the next year. I'm estimating pre-tax EPS in fiscal 2009 will be in the $0.45 ballpark with after tax earnings of $0.30. That makes them quite undervalued at present prices. IECE is a specialty electronic circuit board manufacturer.

Here is some more DD:
1. Excellent Earnings Growth - IECE has been growing revenue and earnings for the past several years. In fiscal 2008 they more than tripled pre-tax earnings. In Q1 of fiscal 2009 their earnings grew 26.7% YOY to $0.06/share.
2. Guiding for Growth to Continue in Fiscal 2009 - They are guiding for increased revenue of 70M in fiscal 2009 and improved earnings. That is a 37% increase from fiscal 2008 If margins remain constant from Q4 I estimate pre-tax EPS for fiscal 2009 of $0.37. However, I think they will improve margins as they just started with integration of Val-U-Tech and have guided for lower costs. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=35165639 Integration efforts with Val-U-Tech are expected to be completed by the end of 2009. Given that I would swag that pre-tax diluted EPS for fiscal 2009 will be $0.45 and after tax diluted EPS of $0.30. Additionally a recent investor presentation indicates that they are laying the ground work for $100M in revenue in the near future and they expect the core business to grow 15+% per year. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=31881662
3. Car Count Indicates Excellent Results - A yahoo poster tracks the Saturday car count and has indicated record levels. Here is a recent example: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=35076382
4. Big Backlog - Backlog at September 30th was $40.5M which is roughly 80% of sales in 2008! http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33546029
5. Strong Book Value - IECE has a book value of $1.78/share. As of 01/30/09 it was trading for less than book value.
6. Empire Zone - IECE has applied for an Empire Zone. If they are granted this empire zone which is likely they will increase their margins due to the tax credits. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=31763344
7. Insider Buying - Over 7K shares were purchased in December plus over 27K shares in September by the President of Val-U-Tech. Those are very significant purchases for a company of this size. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=31936765
8. Additional Acquisition - Per a recent investor presentation they are looking for additional acquisitions.
9. Nasdaq Listing - IECE was previously on Nasdaq. Per a recent investor presentation and filing they are focusing on getting re-listed which I presume would be on Nasdaq. They plan on using a R/S to move the share price above listing requirements.

More DD can be found here:
http://investorshub.advfn.com/boards/board.aspx?board_id=8386