TTM: Excellence Undiscovered

Quick-delivery printed circuit board maker TTM Technologies (Nasdaq: TTMI  ) reported a strong quarter last night, with sales up 24% over last year and a full 150% increase in earnings per share. The company was able to pass on higher materials costs to its customers, keeping its fat margins intact.

TTM also closed its acquisition of the Tyco (NYSE: TYC  ) Printed Circuit Group this week, taking on $200 million of debt to finance the $226 million deal. In return, combined sales should top $650 million annually, versus $288 million for TTM's last four quarters. Management expects the deal to be accretive to earnings within a year.

The Tyco division brings in military and aerospace customers like Northrop Grumman (NYSE: NOC  ) and Boeing (NYSE: BA  ) , and the combined manufacturing capabilities should serve customers of both component businesses well. Happy customers means pricing power and more orders, and it's TTM's stated policy to do whatever it can to please those finicky customers. The acquisition will bring some short-term pain with merger-related costs and lower margins for a while, but in the longer view, I think TTM is significantly undervalued. Take a look at this quick comparison to its closest competitor:

	Market Cap*	TTM Net Margin	Five-Year Annualized Growth Forecast	P/E
TTM	$491	16.9%	18%	10
Merix (Nasdaq: MERX  )	$174	1.5%	15.3%	29

*Numbers in millions.

As you can see, TTM stacks up pretty well. Why?

I think it's a simple case of Mr. Market asleep at the wheel, not giving TTM its just desserts quite yet. The company is thinly followed by a scant eight analysts, and the Associated Press didn't even deem it necessary to cover this earnings report. Tom Gardner may have picked this stock for Motley Fool Stock Advisor, but his Hidden Gems pedigree is showing through here. Do your homework, because this company looks like a multibagger in the making.

Further Foolishness:

• TTM Swallows Tyco Division
• TTM Exceeds Expectations, Drops Like a Rock
• Now Really Is the Time for New Money

TTM is indeed a Motley Fool Stock Advisor recommendation, and you can sign up for a free report to our premium newsletter service to find more great advice from our fearless leaders, the Gardner brothers.

Tyco is a Motley Fool Inside Value pick.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolishdisclosureis always worth some coverage.