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OmniVision Technologies (OVTI) reported earnings after the bell yesterday that beat on both the top and bottom lines. It also offered guidance for the next quarter that beat current projections. The company's revenues are being driven by the huge demand for the iPhone 5. Margins contracted somewhat, a good tradeoff for the extra earnings and revenues that Apple's (AAPL) core franchise provides. I would use any weakness in the market or the stock today to pick up these cheap shares, as we are in the early innings of the iPhone 5 sales cycle.

Here are the highlight's from OmniVision's earnings report and other recent positives:

  • Earnings came in at 33 cents a share, two pennies above estimates.
  • Revenues came in at just over $390 million, ahead of consensus projections of $375 million.
  • The company posted guidance for revenues in the next quarter in a range of $390 million to $425 million for next quarter, above consensus of $365 million.
  • Citigroup came out yesterday saying it sees improved iPhone 5 availability in Q1, which bodes well for Apple and, obviously, OmniVision.
  • In addition, it looks as if China is going to approve the iPhone 5, opening up a huge new market.

OmniVision Technologies produces and markets semiconductor image-sensor devices worldwide.

Here are four additional reasons why OmniVision is a good growth play at $16 a share:

  1. The stock sells for just over 10 times forward earnings, a significant discount to its five-year average (15.1).
  2. The 11 analysts who cover the stock have a $21 a share median price target on it.
  3. The company has over $200 million in net cash on the balance sheet (around 23% of market capitalization).
  4. The stock is selling near the bottom of its five-year valuation range based on P/S, P/CF, and P/B. It has also grown revenues at an average annual clip of 9% over the past five years, although growth has been lumpy.
Source: iPhone 5 Sales Drive OmniVision's Earnings Beat