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Zygo, a high precision optical device manufacturer, and AMETEK, an electronics manufacturer, entered into a deal in which AMETEK will acquire all outstanding shares of Zygo stock at a price of $19.25 per share in cash.
The value of the deal is approximately $280 million. The merger is expected to be completed by the end of the second quarter of 2014.
TheStreet Ratings team rates ZYGO CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate ZYGO CORP (ZIGO) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and increase in net income. 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:
- The revenue growth greatly exceeded the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 39.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ZIGO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.55, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for ZYGO CORP is rather high; currently it is at 54.59%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.41% is above that of the industry average.
- Net operating cash flow has significantly increased by 607.95% to $8.99 million when compared to the same quarter last year. In addition, ZYGO CORP has also vastly surpassed the industry average cash flow growth rate of -8.12%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 383.8% when compared to the same quarter one year prior, rising from $0.84 million to $4.05 million.
- You can view the full analysis from the report here: ZIGO Ratings Report