Stock for the day.
Anyone looking for an IT or LT hold may want to look at Rolf-Sinar Technology (RSTI), today's disaster du jour. Rather than bottomfishing a crappy stock that is dead money, this appears to be a classic Wall Street overreaction.
RSTI reported today --- Q1 profit rose 69% and sales rose 29%, but they guided down for FY 2005. Specifically, the mean of their 2005 range ($380 million) for sales was 5% below analyst's estimates of $400 million. Their profit margin of 39-40% is intact and they reported record backflow in orders. In their conference call, they also noted continued expansion into Asia with formation of a Chinese subsidiary.
The stock, already bargain-priced prior to their earnings report and CC, dropped 17.4% today. It now has a P/E of 15, a price: book of 2.1 and little debt (debt-to-equity ratio of 0.213.
Simply put, this is a tech stock in a good niche (they make a spectrum of industrial lasers for cutting and marking a wide range of industrial materials) that is on sale. Even with their slightly lowered sales outlook for 2005, they have a very healthy growth rate. If interested in something other than a ST trade, you might want to check this one out tonight. It may fall a bit more over the remainder of the week, but this will be a profitable pick over the next year (assuming the market remains reasonably healthy for 2005 --- something I believe to be the case.
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