IPG Photonics Corp (IPGP)

Seems hot and expensive

Fiber optic laser market leader

9.75

Anyone investor considering IPGP should read TMFPlatoish's comments a few pages back first. I have established a modest position but don't plan on adding any time soon. Insider selling is a huge concern to me and I am gambling that the products will carry all before them.

Cyclical high tech mfr. will find its profits grow when economy turns the corner.

At 19.36/shr this looks lioke about a 40% margin of safety to me. They have good debt coverage and high margins.

The company produces advanced, cost-effective lasers, and has been beaten down by Mr. Market. You can't ask for a better combination.

This company has a good product, and it's only going to go up in the next three years. The stock is almost at the lowest point in it's short life of public trading. It could go lower this year as demand for lasers is down, BUT I'm not going to take that chance as I'm in this one for the long haul.

This one is finally cheap enough to jump on board. However, I do so with some mixed feelings and a bucket of long term concerns. IPG is the first significant mover in an emerging technology. Fiber lasers have significant advantages over traditional CO2 lasers in certain applications, not the least of which is lower maintenance costs. For now, IPG is the market leader in this field. While I'm sold on the technology, I'm less sanguine about the company and its management. It is a controlled company in the sense that the founder and his son hold a 50%+ stake. They will be making the decisions and shareholders are along for the ride.

In a situation like this, it is really a bet on management. And there is the rub. I've been put off by what I view as a somewhat arrogant attitude. When I hear the CEO say that their secret recipe for making these devices is safe because they compartment the information and only the folks at the top know the complete recipe, it raises a red flag. Is this a manufacturing company or a clandestine operation? My longer range concern has to do with competition. The established laser companies are all in the process of introducing competing products. When they do, it will come down to who has the better sales, service, and support infrastructure. This competition is established globally and has worked with the customer base for many years. Can IPG compete on a level playing field with price, reliability, and support as the important factors, or will it fade as its first mover advantage weakens and its technology becomes less important than its customer service?

We'll see over the next few years. In the meanwhile, I think it will beat the broader market.

Leaders in the Fiber Laser industry, by far, a multi-BILLION dollar industry.

Recessions make great times to shut down and retool. This company will be well positioned to continue on its growth path over the next few years.

Industrial laser market expected to be down for next 1-2 years

Rising revenue despite global downturn, great margins, cash flow from operations is positive & increasing. Only worry is receivables and inventory increasing more steadily than cash.

Fiber optics & lasers, two crucial components of the IT sector and this stock is a steal at $8.00

I expect slow growth for the next couple years. I like the company's LT Debt/Equity. There's room to grow in this industry. They provide a low cost product. They're business plan is aggressive, looking for ways to replace traditional products with the less expensive, high quality product they manufacture. They're R&D is seeing great growth in comparison with their revenue growth. I like what they're doing.

High technology in springtime...

Plus the chart has two devilish horns.

Comment 2/28/09

IPGP has about a 2-3 year R&D advantage over competitors in the growing fiber laser market. It seems to be gaining market share in this down time which will allow it to emerge stronger when the global economy returns and it is just finishing up a cycle where it has added capacity with relatively little debt.

It is also continuing to invest in R&D and adding sales force in an intelligent way.

The recipe equals success.

Fiber Lasers. Cool stuff. Dad founded the company in 1990 and has been the CEO and Chairman of the Board ever since. Son is R&D veep since 2000. Executives have mandatory stock ownership guidelines commesurate with their salaries.

Near the 52 wk low, good buy at this price