Multi-Fineline Electronix, Inc. (MFLX) raised 2009 guidance on Jan 5 on strong customer demand for its circuits as the small tech products such as smartphones continue to be hot. MFLX has surprised on estimates 3 out of the last 4 quarters on average of 102.06%. MFLEX has a forward P/E of 11.4.

Company Description

Multi-Fineline Electronix, which calls itself MFLEX, is one of the world’s largest producers of flexible printed circuits (FPC) and flexible printed circuit assemblies (FPCA).

The company’s products are used in mobile phones, smart mobile devices, portable bar code scanners, personal digital assistants, computer/storage devices, and medical devices. MFLEX has operations in Suzhou, China.

MFLEX Raises 2009 Guidance

On Jan 5, MFLEX raised first-quarter 2009 guidance based on strong customer demand that continued into the second quarter. Revenue is now projected to be approximately $215 million with gross margin percentage in the 14% to 16% range. Prior guidance called for a gross margin percentage in the 10 to 15% range.

The company is very bullish heading into the second quarter of 2009. It also announced a share repurchase program for up to 2.25 million shares of common stock which would represent about 9% of the outstanding shares.

“We believe the current share price is not indicative of the Company’s long-term intrinsic value, and this repurchase plan underscores our confidence in our business prospects,” said Reza Meshgin, President and CEO.

“Additionally, given our strong balance sheet and cash flow from operations, we believe the share repurchase program is both a timely and appropriate use of the Company’s capital resources,” he added.

MFLEX Crushed Third Quarter Estimates by 78.95%

On Nov 3, MFLEX reported fourth-quarter 2008 earnings and easily beat estimates by 30 cents a share. Sales rose 27.8% to $213.1 million from $166.7 million in the year ago period. Higher sales to the company’s three core customers accounted for most of the gain. The core customers include 4 of the top manufacturers of portable electronic devices.

Fourth quarter gross margin rose to 16.1% from 8.5% in the same period a year ago. The gain was the result of a favorable product mix and improved yields.

Consensus Estimates Rise

Even before the recent upward guidance revision, consensus estimates had been rising for the first quarter 2009 and the full year. First-quarter estimates rose 3 cents in the last 7 days to 37 cents a share. 2009 consensus estimates jumped to $1.42 from $1.38 in the last week. Analysts project 5-year earnings growth of 15.70%.

Value Fundamentals

Multi-Fineline Electronix is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 11.40. Its price-to-book is 1.30. It has a solid 5-year average return on equity (ROE) of 15.84%.

“MFLX” Free Stock Analysis: Buy? Sell? Hold?
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