Electro Scientific Industries, Inc. (NASDAQ:ESIO)

CAPS Rating: 5 out of 5

The Company designs and manufactures manufacturing equipment for the global electronics market, including advanced laser systems that are used to microengineer electronic device features in production environments.

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Player Avatar Ganndalf (70.18) Submitted: 9/17/2007 7:46:57 PM : Outperform Start Price: $21.34 ESIO Score: -44.69

I swiped this company from some smart Fools, but so far it hasn't delivered much- up about 3% so far in 7 months. This company is not one I'm well acquainted with, but here's what I see:

It's a newsletter pick so that right there makes it worth a close look. Profit margins are a healthy 9.4%. Forward p/e is 18 and long-term growth estimate is for 15% per year. That doesn't seem like much of a bargain unless the estimates turn out to be incorrect. One Fool says that the P/E looks better when you back out the cash. They have been strongly cash-flow positive the last 3 years or more. From the 1 year chart, ESIO has been gradually trending upward since it low-point in mid-March. They are covered by just 5 analysts, which is fairly small. The most optimistic analyst price target puts them at $27, which would be a close to a 25% gain from here.

Here is a link to their webpage: http://www.esi.com/esi/

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