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 Click to see monthly returns in table format!

Lists

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

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!