Earnings Releases: PCP

PCP is down 30% since mid-December. But consider their fundamental business strength:
* Net income for the quarter $1.73 per share versus analyst estimates of $1.72 per share. That is up from $1.14 last year (55% gain)
* Quarterly sales of $1.7 B versus analyst estimates of $1.74B. That is up from $1.38B, a 22% rise.
* A low P/E of 19
* Net Margins increased YoY to 21.4% from 16.9%

So why the drop? Partly the concern over the $40M gap between expected and actual sales. And partly concern that they beat by only a penny (growing 'only' 55%). I don't know what caused the sales gap - obviously at 21.4% net margins, $40M would yield an additional $0.06 EPS.

WHY YOU SHOULD BUY MORE
This company has it all: rising sales and accelerating margins.
From a business environment perspective, they also have everything going their way.
Costs are dropping - Nickel and other raw materials are dropping in price
Production is increasing - They have more production lines starting up this year, which means more sales
Demand is booming in aerospace - This growth is coming BEFORE Boeing begins Dreamliner shipments. As we know from GE's release, demand for engines is through the roof - and that confirms the demand for PCP products as well
Incredibly low valuation - A P/E of 19 with 30% projected earnings growth next quarter and a conservative 18% forecasted growth next year.

The upside is that when Boeing begins shipping Dreamliners, PCP will have the production line capacity to meet the strong demand. The current forecasts of sales and earnings are too low imho.