IPG Photonics Corporation (IPGP): A Laser Company With Staggering Growth Potential

Page 1 of 2

IPG PhotonicsThe common reason for distressed earnings is, “higher labor costs.”  Yes, humans have an upper hand in discretionary tasks, but recurring industrial tasks like welding, etching and cutting can be automated. But precision holds the key, and robotic arms are no good if they are not equipped with proper tools. As technology advances and designs get more sophisticated, fiber optic lasers are not only cost effective but also save time. This presents a bullish case for fiber optic laser industry, and here are a few reasons why I love IPG Photonics Corporation (NASDAQ:IPGP).

The Company

IPG Photonics Corporation (NASDAQ:IPGP) is the leading manufacturer of fiber optic laser, and offers a wide range of fiber amplifiers and diode lasers. The company has three laser segments, low power (1W to 99W), medium power (100W to 999W) and high power (1kW to 50kW). Over the last 5 years, its shares have appreciated by nearly 250%, primarily due to mass production capabilities and timely deliveries. Fiber lasers don’t require consumables. This reduces the operating costs of cutting and welding dramatically and makes the laser technology an economically viable replacement for gas cutters and conventional welding machines.

Expanding Horizons

IPG Photonics recently launched its kilowatt class lasers that deliver nearly 200% better beam quality with almost double MTBF (Mean Time Before Failure). These lasers offer 33% wall-plug efficiency against the previous 30% and enhanced its warranty cover to 3 years. Its management told that it would be launching new products and entering new markets in 2013.

Last week, Eastman Chemical showcased perhaps its most innovative offering, developed by IPG Photonics. The new technology enables consumers to welding clear-to-clear polymers using fiber lasers, which are invisible to the human eye. IPG Photonics continues to impress and some of its upcoming launches include UV fiber lasers, ultra short pulse lasers and megawatt class lasers.

The laser company with a market cap in excess of $3 billion, recorded a staggering 36% increase in sales from its operations in Asia. The company hired experienced general managers with technical expertise, for each China, Japan and Korea. Its management believes that emerging nations hold the key to its growth, and expects an even better FY13.

Its order backlog stood at $203 million, down from $207.3 million last year. In the recent earnings call, its management told that there was a sudden rush of orders in January and incoming order remain strong. “It appears that customers were holding orders until the new year because there has been a strong stream of incoming orders in January that has so far offset the softness from Q4.”

Its cash and cash equivalents stand at $384.1 million, which alone contributes to more than 10% of its enterprise value. It quarterly inventory was worth $139.6 million, which was up by 19.4% on a year-over-year basis.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!