Shares of Nam Tai Electronics (NYSE:NTP) had gained 79% over the past year as of last Friday. Then the electronics manufacturer released third-quarter results into the wild.
This kind of introduction is usually a setup for a huge fall. Stock rises on insane expectations, numbers don't match the dream, shares plunge. Lather, rinse, repeat.
But not this time. Nam Tai's results were all that and a bag of potato chips, and the stock soared another 41% on Monday. The stock price has now nearly tripled in six months, and it's suddenly one of the five biggest winners on my CAPS scorecard right behind hyper-growth rockstars Cirrus Logic (NASDAQ:CRUS) and Universal Display (NASDAQ:OLED).
The similarities between these success stories actually run deep. All of them are direct bets on the exploding smartphone and tablet markets. Cirrus built its business on audio chips for Apple's (NASDAQ:AAPL) entire line of mobile gadgetry while Universal Display supplies OLED technologies on the Android side of the market. Nam Tai tripled its sales year-over-year as an unidentified new customer -- which probably rhymes with "chapel" -- ordered up millions of Nam Tai's LCD panel modules.
Nam Tai is expanding it manufacturing facilities and getting out of low-margin orders. That way, the company can double down on the LCD panel business that's driving the operational train these days.
As impressive as the third quarter was, management sees even bigger gains developing in the fourth quarter as the revamped business model matures. "We are optimistic about the rest of the calendar year 2012 and we are positioning ourselves for better results in 2013," said CFO Ming Kown Koo. Walking the talk, Nam Tai more than doubled its quarterly dividend payout to $0.15 per share. That works out to a generous 4% yield at today's prices, or 5.6% if you bought shares on Friday.