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Portfolio holding Exponent (NASDAQ:EXPO) delivered a very strong earnings report on January 31. The company significantly exceeded both street estimates as well as my own internal estimates for earnings led by strong revenue growth and improved margins in the business.

Looking ahead, the company seemed excited on their conference call about growth into 2008 with revenue growth expected in the high single digit to low double digit range with EPS growth likely a bit above that. The company continues to have very strong fundamentals with over $4 per share in cash, regular quarterly share repurchases, no long term debt and operates in an area which is predominantly non-cyclical in nature.

The company tends to be somewhat conservative with their guidance but based on the results reported today and the business outlook along with continued share buybacks I would not be surprised to see the company deliver in the $1.52-1.60 range in earnings next year which is significantly above current street estimates which assuming no acquisitions would give the shares a enterprise value/earnings ratio of 14-15x.

Overall, I consider EXPO to be a core holding in the portfolio at these price levels.

Disclosure: Long EXPO