By
Anders Bylund
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February 8, 2008
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Now we're talking serious business. Quick-turn printed circuit board (PCB) manufacturer and Motley Fool Stock Advisor recommendation TTM Technologies (Nasdaq: TTMI ) is finally showing us the good side of its merger with a Tyco (NYSE: TYC ) unit in the fall of 2006.
I said ahead of the report that the margins would tell the story now, after a year of not-too-comparable year-over-year comparisons. And in the fourth-quarter comparison, margins improved in a very impressive manner, starting with a slight boost on the gross take and culminating in 7.1% net margins this fourth quarter, compared to only 3.6% during the same time last year.
About 30% of the revenue comes from defense contractors Northrop Grumman (NYSE: NOC ) and Raytheon (NYSE: RTN ) . Those alpha dogs have stable operations that maintain their balance, and as a result are some of the best performers in the market today. Another 40% or so comes from builders of networking and communications hardware, such as the ever-dependable Cisco Systems (Nasdaq: CSCO ) and a resurgent Juniper Networks (Nasdaq: JNPR ) .
If those companies want their boards yesterday, as is often the case in the fast-moving tech arena, they often have nowhere else to turn. So their good news is often great tidings for TTM.
The challenge now changes from proving that the Tyco acquisition was worth the cost to showing what you can do when the house is pretty much in order, as it is today. And thanks to a solid customer list and a unique market position, the future of a TTM firing on all cylinders looks very bright, recession fears notwithstanding.
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