NEW YORK (TheStreet) -- Shares of Measurement Specialties Inc. (MEAS) are up 10.35% to $86.07 after TE Connectivity (TEL - Get Report) announced late Wednesday it entered into a definitive agreement to acquire the sensor company for $1.7 billion, or about $86 per share in cash.
TE Connectivity said it expects the global sensor market will grow to $116 billion by 2019 from $80 billion this year.
TE Connectivity, formerly known as Tyco Electronics, split from Tyco International Ltd (TYC) in 2007.
"We rate MEASUREMENT SPECIALTIES INC (MEAS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MEAS's revenue growth has slightly outpaced the industry average of 9.2%. Since the same quarter one year prior, revenues rose by 17.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- 46.45% is the gross profit margin for MEASUREMENT SPECIALTIES INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.89% is above that of the industry average.
- MEASUREMENT SPECIALTIES INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MEASUREMENT SPECIALTIES INC increased its bottom line by earning $2.26 versus $2.11 in the prior year. This year, the market expects an improvement in earnings ($2.91 versus $2.26).
- Despite currently having a low debt-to-equity ratio of 0.37, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that MEAS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.90 is high and demonstrates strong liquidity.
- Net operating cash flow has increased to $14.71 million or 13.86% when compared to the same quarter last year. Despite an increase in cash flow of 13.86%, MEASUREMENT SPECIALTIES INC is still growing at a significantly lower rate than the industry average of 71.40%.
- You can view the full analysis from the report here: MEAS Ratings Report