The tech sector continues to offer myriad opportunities especially in the small cap space. One stock that has moved up some 50% over the last few months but still has momentum and is relatively cheap is Sypris Solutions (SYPR).
Key catalysts for Sypris:
- Two insiders bought $75,000 worth of shares in May.
- The company was added to the Russell 2000 at the end of June.
- Sidoti initiated the stock as a "buy" in June.
- Consensus estimates for both FY2012 and FY2013 have gone up substantially over the past three months.
Four additional reasons Sypris is solid pick up at around $6 a share:
- The company has easily beat earnings estimates for the last three quarters. Second quarter estimates have roughly doubled from where they were three months ago and the next report is due out Tuesday.
- Sypris has a solid balance sheet with 9% of its market capitalization in net cash. It also provides a dividend yield of 1.3%.
- The stock is selling at 31% of annual revenues, analysts expect almost 15% revenue growth in FY2012 and has a five year projected PEG of under 1 (.99).
- Sypris quintupled operating cash flow from FY2009 to FY2011 and sells for less than 9 times forward earnings.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in SYPR over the next 72 hours.