Liquidity Services operates various online auction marketplaces for surplus and salvage assets such as liquidation.com, govliquidation.com and govdeals.com. The sites help businesses, governments and agencies sell surplus and salvage assets.
Earnings Surprises Streak
LQDT has posted results ahead of expectations for the last seven straight quarters. All but one, has led to stock price appreciation. The beats in each of the last three quarters were significant. The company reported $0.42 in the June 2011 quarter, fully $0.25 ahead of expectations or a beat of 147%. The September 2011 quarter saw a 57% beat and the most recent quarter saw a 39% beat.
These big beats have led to strong moves for the stock. The June 2011 quarter saw the stock advance 15% following the earnings report. Similarly, the stock moves for the following two quarters were 9% and 14% respectively.
LQDT Reported Earnings
On February 1, 2012 the company reported revenue of $106 million up from $79 million in the year ago period. In addition, earnings per share came in at $0.32 up from $0.13 posted a year ago.
LQDT is not a cheap stock by almost any measure that aggressive growth investors tend to look at. Forward and trailing PE's in the mid 30's are well above the industry average of 12x and 17x respectively. Price to book, a more conservative measure, also carries a healthy premium when compared to the industry average. A price to sales multiple of 3x compares most favorably of all the metrics when compared to the industry average of 2x.
The chart for LQDT shows just what aggressive growth stock investors are looking for, consistent upward movement. There have been some isolated dips down, but they tend to be very short. LQDT is a Zacks #1 Rank (Strong Buy).
Brian Bolan is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor service
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