Zacks Investment Research upgraded Veeco Instruments Inc. (VECO) to a Zacks Rank #1 (Strong Buy) on Jan 2, 2015. Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of performing better than the broader market.
Why the Upgrade?
A couple of events in the past few days have lifted investors’ sentiments on Veeco Instruments Inc., as evident from the upward revision in earnings estimates for the company. Over the last 30 days, the company added the assets of Solid State Equipment Holdings LLC to its portfolio. The acquisition is expected to complement the company’s compound semiconductor and MEMS business, thereby, boosting its earnings generation capabilities.
Also, Veeco Instruments’ share price has gone up by 13.8% since the company reported better-than-expected results for third-quarter 2014. The bottom-line came 45.8% above the Zacks Consensus Estimate. Gross margin improved 440 basis points as the company managed to control its costs of sales. Further improvements in results, induced by business growth initiatives and costs curtailments, are expected in the upcoming quarters.
Over the last 60 days, the Zacks Consensus Estimate for Veeco Instruments rose 30.6% to 81 cents for 2015. Also, the company’s earnings are predicted to grow by 10% over the next 5 years.
Other Stocks to Consider
Veeco Instruments Inc., currently, has a $1.4 billion market capitalization. Other stocks worth considring in the machinery industry include Brooks Automation, Inc. (BRKS), Cohu, Inc. (COHU) and Rudolph Technologies Inc. (RTEC). All these stocks carry a Zacks Rank #2 (Buy).
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