Unappreciated Stock Could Be Next Rising Star

There are a lot of standout stocks in this market, but a lot more standout companies. Naturally, it’s much more difficult to get capital gains from equities in a bear market and, among many stocks, small-caps in particular are suffering.

They are suffering because the market isn’t interested at this particular point in time. This creates opportunity for the individual investor with the will and the staying power to hold onto some interesting, growing companies.

One small company that continues to look very interesting in this market is Amtech Systems, Inc. (NASDAQ/ASYS). This company manufactures specialized equipment that is used to automate the handling of silicon wafers and semiconductors used in the fabrication of solar cells and semiconductor devices.

The company, founded in 1981, was first known as Quartz Engineering & Materials, Inc. before it changed its name to Amtech Systems in 1987. The company is based in Tempe, Arizona.

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Amtech just reported its numbers for the latest quarter and they were very good. Revenues for the third quarter of fiscal 2008, ended June 30, 2008, came to just over twenty-four million dollars, representing growth of 88% over the comparable quarter in fiscal 2007, and up 37% sequentially from the second quarter of fiscal 2008. The company noted that it experienced lower shipments to the semiconductor industry, but greater sales to the solar industry.

Gross margin in the third quarter was 29%, up slightly from gross margin of 27% in the third quarter of fiscal 2007 due mainly to higher shipment volumes and better economies of scale.

Net income for the third quarter of fiscal 2008 was $1.2 million, or $0.13 per diluted share, as compared to net income of $1.0 million, or $0.15 per diluted share, for the third quarter of fiscal 2007.

For the nine months ended June 30, 2008, Amtech’s revenues grew to fifty-three and a half million, representing a 63% increase over last year. Net income was $1.4 million, or $0.16 per diluted share, as compared to $1.3 million, or $0.25 per diluted share, for the same period in fiscal 2007.

The company finished its third quarter of the year with an order backlog of just over sixty million dollars, as compared to close to twenty-one million dollars as of June 30, 2007.

For the fourth quarter of fiscal 2008, Amtech reported that it expects revenue to be between twenty-two million dollars and twenty-four million dollars, representing growth of approximately 68% to 83% over the fiscal 2007 fourth quarter. For all of fiscal year 2008, revenues are expected to be in between seventy-five million dollars and seventy-seven million dollars, representing growth of 63% to 67% over fiscal 2007.

Amtech Systems is just one more small company that is unappreciated in this marketplace. I don’t know when sentiment is going to turn, but, when it does, under-followed companies like Amtech should benefit once again.