Tuesday, January 4, 2011

Profit Recognition (NASDAQ: CGNX)

Cognex Corporation (NASDAQ: CGNX) is down over 7% as investors take their profits for the year. The stock currently resides just above $28 per share and trades at 19.5 times 2010 earnings. Cognex's revenue has been increasing rapidly in the last year. The company has grown over 1200% whereas the stock has run up 55%. Cognex's earnings are expected to be $1.43 for 2010 - higher than they have been in years. The company had raised its dividend by 33% just 2 months ago, signaling that business is improving. Cognex operates in the machine vision business, where it develops products for automatically checking products such as chips and cell phones for defects. The company recently came out with a new product for reading bar codes with various types of blemishes and damage, from any orientation.

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