Hey Oxen Report Readers,
I am unable to post still in the mornings, so I am posting overnight a trade that you should make today that will cash out on Friday with what I hope is big movement like some our other overnight trades we have made. Let’s get into the trade for tomorrow.
Overnight Trade of the Day: Mistras Group (MG)
Most of you may not be familiar with this small capper. Mistras Group is technology service company that provides solutions used to evaluate the structural integrity of critical energy, industrial, and public infrastructure worldwide. This service company is a relatively new company and is up and coming with the need for energy, infrastructure, and public works overhauls. The company has had some pretty consistent building quarter to quarter, and I am excited about the company’s report that is coming out tomorrow night.
Analysts are estimating that Mistras Group will hit an EPS of 0.14. The company saw a 19.3% revenue climb from Q1 of 2010, which was the latest fiscal quarter for MG over one year prior to that. The company saw a 27.7% growth in services and the company said they believe that they will continue to see a lot of growth in this sector as they continue to grow internationally. The company’s almost 20% growth in revenue in Q1 is a sign of a growing company, and I am expecting another big quarter.
The service sector has had a mixed bag as far as results for the quarter. Mistras Group’s most closest competitor Team Inc. beat its latest quarterly profits 0.34 vs. 0.30. TISI saw a pretty solid increase over quarter to quarter results in the winter quarter as well, increasing by over 100% from Q3 to Q4. Mistras Group had an EPS of 0.08 in the latest quarter, and I think we can expect similar results. Team even had a down quarter, and Mistras’ executives appear to be highly optimistic about the quarter.
"While there is still a great deal of economic uncertainty, we are being cautious as to our outlook, but we are seeing many opportunities for continued profitable growth. As always, our focus is on our revenue growth and enhanced earnings. We believe our major customers are looking to us for the value added proposition of increased productivity from our asset protection solutions" said Chairman and Chief Executive Officer, Dr. Sotirios J. Vahaviolos.
Finally, Mistras has the final criteria necessary for an Overnight Trade of the Day because the stock has been oversold going into the announcement and presents a great value trade. Since its last quarterly beat, the stock has risen 25%, but it has recently lost just under 8% in the past week of trading, going into earnings. Investors bought up on the news, but I do not think they are thinking another tremendous earnings report can happen. I like this company, and I think it has a strong future. We could see a nice 4-5% jump on Friday after earnings are announced. Get in tomorrow early if the market is doing well because it may see somewhat of a run up. Otherwise, if the market is bad, get in on a nice discounted price.
Good Investing,
David Ristau
