inTest Corp -- looking cheap and threatening to breakout
I have a stock screener setup that looks for stocks with several fundamental growth characteristics combined with two technical characteristics. Here’s how it looks:
- Company is profitable; ie, PE above zero
- Quarterly YoY sales growth positive
- Quarterly YoY earnings per share growth positive
- Return on Equity over 20%
- Debt to Equity ratio under 1
- Stock’s performance is 5% above the S&P 500
- MACD just turned bullish
To this list I added one more criteria: price should be under $5.
Two stocks popped up:
- Full House Resorts, Inc. (FLL) – a company in the Copnsumer Services-Misc. Amusement & Recreation sector
- InTest Corp. (INTT) – a company in the semiconductor automated test equipment sector
Since I tend to be most interested in tech stocks, let me focus on inTest.
inTest specializes in the hardware that interfaces between probes and the chips being tested. It also offers thermal testing equipment including test chambers. At a market cap of $42 million, they fall into the microcap category.
The stock must be quite overlooked as it’s valuation appears to be quite cheap. The PE is less than 6, Price to Sales is less than 1, Enterprise Value/EBITDA is under 5 and PEG is only 0.34. As mentioned above, the screen requires the stocks to be profitable and inTest certainly is as well as being cash flow positive.
Furthermore, the stock appears to be working on breaking out. Here is the chart:
Note the reversal above the blue trend line and the surge above the 50-day moving average in addition to the bullish move in MACD.
Though profitable, the company has been facing some financial headwinds. The following chart shows that year-over-year sales and earnings were good but the last few sequential quarters have shown declining results.
The stock will report earnings next week so we’ll see if they can show some better sequential results. In the meantime, however, it is worth noting that there have been a number of acquisitions in the semiconductor test equipment sector. inTest themselves recently bought a German firm. In any case, the sector is ripe for consolidation as many of the companies operating in the sector are small but profitable.
In summary, inTest is a tech stock mired in deep value territory but with its technicals turning positive. It’s potential to be a takeover target make it an interesting play but it makes sense to wait a few more days until those earnings are reported.
Disclosure: no positions in any stocks mentioned in this post
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Lion’s Mane Mushroom
Mushrooms are having a moment. One fabulous fungus in particular, lion’s mane, may help improve memory, depression and anxiety symptoms. They are also an excellent source of nutrients that show promise as a therapy for dementia, and other neurodegenerative diseases. If you’re living with anxiety or depression, you may be curious about all the therapy options out there — including the natural ones.Our Lion’s Mane WHOLE MIND Nootropic Blend has been formulated to utilize the potency of Lion’s mane but also include the benefits of four other Highly Beneficial Mushrooms. Synergistically, they work together to Build your health through improving cognitive function and immunity regardless of your age. Our Nootropic not only improves your Cognitive Function and Activates your Immune System, But it benefits growth of Essential Gut Flora, further enhancing your Vitality.
Our Formula includes:
Lion’s Mane Mushrooms which Increase Brain Power through nerve growth, lessen anxiety, reduce depression, and improve concentration. Its an excellent adaptogen, promotes sleep and improves immunity.
Shiitake Mushrooms which Fight cancer cells and infectious disease, boost the immune system, promotes brain function, and serves as a source of B vitamins.
Maitake Mushrooms which regulate blood sugar levels of diabetics, reduce hypertension and boosts the immune system.
Reishi Mushrooms which Fight inflammation, liver disease, fatigue, tumor growth and cancer. They Improve skin disorders and soothes digestive problems, stomach ulcers and leaky gut syndrome.
Chaga Mushrooms which have anti-aging effects, boost immune function, improve stamina and athletic performance, even act as a natural aphrodisiac, fighting diabetes and improving liver function.
Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules. Today Be 100% Satisfied Or Receive A Full Money Back Guarantee Order Yours Today By Following This Link.