This week’s top idea from Singular Research is GSI Group, Inc. (GSIG), which supplies laser-based solutions, laser scanning devices and precision motion and optical control technologies to various global markets, including industrial, electronics, medical, and scientific industries. We currently have a Buy rating on the company and have maintained a price target of $15.
The company recently announced its fourth quarter results and Q4 revenues were in line with Singular’s expectations. GSI’s earnings did beat our estimates.
For Q4, GSI reported revenues of $79.8 million, compared to revenues of $91.6 million from the year prior. The decrease had been expected due to the softening of demand in the printed circuit board markets. GAAP net income was $3.9 million, or $0.11 per share, compared to the prior quarter loss of $1.7 million, or $0.05 per share.
Some of the reasons for why we like GSI’s prospects include the company being able to bring debt levels down, as expected. In addition, it’s 12 X 12 cost savings program is on track. The 12 X 12 program is a 12-month program is targeting an annualized cost savings of as much as $5 million by eliminating up to 12 facilities.
The company also said it started shipping its 1-kilowatt Fiber Laser in the fourth quarter and announced plans for a multi-kilowatt product launch sometime in the latter part of 2012. Singular also expects to raise our EPS estimate for 2012, but that is pending a review of the company’s 10-K filing.