NVE Corp (NVEC)

Negative Earnings Surprise

NVEC (NVE Corp)
NVE Corp develops and sells sensors that are used to acquire and transmit data in industrial, scientific and medical applications. The uniqueness of their products is that the devices us "spintronics" (a nanotechnology that relies on electron spin rather than electron charge to acquire, store, and transmit information. I've seen pictures of these products, and they are much smaller then a fly, and some apparently weigh less then a mosquito. They have 52 patents that provides them with a moat with this technology.

Usually I avoid recommending any company who's products I don't understand fully, and I really have no idea what the competitive landscape for this company may look like in a decade from now, but I'll give this one an exception based on their great financial. This company makes a whopping 42% profit margin! That is insane! I can't think of one other company that consistently can kick out that kind of margin. Then add in their growth over the past 5 year average of 16% on their top line and 44% on their bottom line, and compare that to their trailing earnings multiple of 17 and forward estimates of 14, and you have quite a deal, especially when you consider they have $4 million in cash and no debt.

So again, although I have no idea what this may mean (from their annual report) "A limited number of other companies claim to either make or have the capability to make GMR and TMR sensors. Also, several competitors make solid-state industrial magnetic sensors including silicon Hall-effect sensors and anisotropic magnetoresistive (AMR) sensors. We believe those types of sensors are not as sensitive as our GMR or TMR sensors." I'll still be placing a small bet on this company due to the great growth rates it is experiences combined with it's incredibly fat profit margin.

RK

Nanotechnology that makes money.

TigerPack - http://caps.fool.com/player/tigerpack.aspx

low analyst coverage, high ROE, no LT debt, high EPS growth over past 3 years

it's troubling that only 0.25% is held by insiders (so says yahoo finance)

Trendline support

1/103 in Semiconductors -(74.8 @ B+/A+)

Excellent fundamentals. High margins and they havn't had a pennys worth of debt on their balance sheet for 3 years. They make tons of money and don't have to spend much to do it. High returns on assets and investments. Steady earnings growth. History of positive earnings supprises and growing earnings estimates.

company is a cash machine. No debt. Great technology.

ibd beta.investors.com 3/20/9 most active ups

New Technology

Underperform

Best products, MRAM, labratory on a chip will be huge, anti tamper mram, among other future products.

Spintronics is the wave of the future. If NVEC has the paradigm, they will be filthy rich...

another company around 10% off its highs at a buy point...They make a cool memory product that could become huge...They have beat earnings estimates each quarter including a big beat last quarter

Really fantastic tech. A common sense approach to memory state change; designer molecules. I really could care less about the short term...this one's about long term patent strength.

Electron spin rather than electric charge is the future of memory. NVEC owns key patents. Bank on this one.

NVEC's technology hidden under MRAM will be the source of it's success. The management needs to be savvy with the fledging company.

The stock market is largely ignoring the recent oil spike as something that cannot persist in the current stage of the business cycle but this is in turn feeding higher oil prices. The stock market is about to realize where oil is going and fall; and most affected will be today's leading IT sectors.