Colin Fisher Firan Technology Group Corp. FTG-T BUY May 11, 2016

Circuit boards for airplanes. Very complex. They have done a good job. He likes the earnings growth. They have good visibility. It trades at a low multiple. The only caveat is that they are thinly traded.

(Top Pick May 12/16, Up 49.16%) They have good visibility. Now there are a few people covering it. Earnings were up over 20% last quarter. They made an acquisition and so now can ramp up their manufacturing. It is still very small and they have one very large shareholder. He thinks it will continue to do well.

It has been way too successful for him to be buying it now. Insiders may have been selling. When that happens, you have to be somewhat wary, especially if they are selling quite a bit.

This does circuit boards for aerospace. Market cap is only around $80 million or so. They’ve put up some very good numbers in terms of earnings. Made an acquisition about a year ago, and you are going to start to see the costs and synergies with that acquisition as they get the capital and utilization up. He still likes the story.

(A Top Pick May 12/16. Up 70%.) Electronic circuit boards and display equipment. It looks like they are going to put up some good earnings this year. In 2018 they’ll be able to earn $.40 or so. The problem is, there is not much liquidity to it.

They are growing organically very nicely and making accretive acquisitions as well. They have a record backlog right now that will translate into results next year and they expect their margin to increase after the most recent integration is complete. (Analysts’ target: $5.28).

It has done extremely well since he last recommended it. They made some management changes but he still likes it. There are more and more planes being ordered. It is fairly cheap but there is not a lot of liquidity to it. It still looks cheap. He thinks they will come out with better quarters.

Circuit boards for airplanes. Earnings have been quite volatile. It is a bit lumpy. They made acquisitions and are trying to get the synergies from them. You have to hold on. The visibility is quite good. There have been quite a few takeouts in that sector. He likes the space and the management team.

FTG is a small ($230M market cap) global supplier of aerospace and defense electronic products and subsystems. It operates through 'FTG Circuits' (high-tech circuit boards for aviation, defense, and high-tech customers), and 'FTG Aerospace' (designs and manufactures illuminated cockpit products and electronic assemblies). It is hitting new 52-week highs, its five-year sales and earnings have grown at an 8% and 12% CAGR, respectively. Sales growth has been strong in recent years, margins are moving up and to the right, debt levels are low, and it trades at a decent multiple of 16.5X forward earnings. We think it is a strong name with good potential. Some of the risks include its small size ($230M), sales growth has been volatile over the years, and its business is somewhat cyclical. 
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