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.