Orbotech Ltd. (NASDAQ: ORBK) Ready to Pop?

It is no secret that demand for Apple’s (NASDAQ: AAPL) next-generation iPhone, the iPhone 6s, and its new and larger tablet, the iPad Pro, has been huge. While this good news does not yet seem to have a profound effect on Apple’s share price, 1 bottomed out small cap tech stock that is a are beneficiary of these Apple launches could turn into a big winner.

Under the Radar
The most obvious beneficiary of these new technology gadget releases is Orbotech Ltd. (NASDAQ: ORBK), an under-the-radar stock that is a major player in the technology world. The last sentence buried in the company’s description is the key takeaway: Virtually every electronic device in the world is produced using Orbotech systems. 

The company has the world’s leading market share in the sale of automated optical inspection equipment used in the production of printed circuit boards, flat panel displays, and other micro-electronic components. With the advancement in technology capabilities and the migration to smaller and thinner components, Orbotech’s inspection equipment ensures there are no defects and thus enhances the production yield for manufacturers all over the world, including the producers of the iPhone 6s.

Down over 30% from its June 2015 high due to the recent Asian contagion, Orbotech’s shares trade at a ridiculous valuation. The Street is projecting earnings per share (EPS) to grow from $0.83 in 2014 to $1.98 in 2015 and $2.24 in 2016. Yet, trading in the $15 range, the P/E on 2015 estimated earnings is under 8x, despite the fact that EPS for the first six months of 2015 is already $1.01, a 21% rise over EPS for all of last year! High product demand and profitability should serve as catalysts to drive the low-valuation stock back to the $22 level in the coming months, which would represent a paltry 11 P/E on 2015 earnings per share.