On Jun 5, 2013, Zacks Investment Research upgraded Key Technology, Inc. (KTEC) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Estimates for Key Technology have undergone sharp upward revisions following the company’s better-than-expected second quarter financial results on May 2 with an earnings surprise of 322.22%. This helped the manufacturer of services process automation systems attain a 52-week high of $16.40 on May 8.
Key Technology reported second-quarter 2013 earnings of 38 cents per share, reversing its year-ago loss of 13 cents per share as well as the first quarter loss of 16 cents per share. Margins were aided by improved product mix and more efficient plant utilization.
Key Technology ended the second quarter with a record backlog of $50.1 million compared with $34.7 million one year ago. New orders received during the quarter were $32.7 million, up from $24.9 million in the corresponding period last year. The orders include several important orders, mainly in the potato and processed fruit and vegetable markets.
Key Technology completed the acquisition of Belgium-based Visys NV, a supplier of innovative digital sorters, in the second quarter. The total value of the deal was approximately $21 million. The transaction is expected to be accretive within the first twelve months. The acquisition will increase Key Technology’s share in its core markets, help expand into new high-potential markets, and accelerate its development of next-generation sorting technologies.
The Zacks Consensus Estimate for 2013 increased 39% to 43 cents per share, translating into an impressive 431.25% annual growth.
Other Stocks to Consider
Other stocks to watch out for in the industry are Graco Inc. (GGG), Hyster-Yale Materials Handling, Inc.’s (HY), with a Zacks Rank #1 (Strong Buy), and Columbus McKinnon Corporation (CMCO), with a Zacks Rank #2 (Buy).
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