MIND MIND Technology Inc

Mitcham Industries, Inc. (MIND) is coming off of a record-setting quarter that has estimates darting higher. They did issue more shares, but that has actually moved estimates even higher.

Valuations look as pretty solid, especially considering earnings are expecting to grow by more than 4 fold over the next 2 years.

Company Description

Mitcham Industries, Inc. supplies geophysical equipment for the oil and gas industry, environmental agencies, universities and other organizations. They have offices around the world and their products are used in both land and marine projects.

Record Quarter

The first quarter for fiscal 2012 broke some company records when results came out on Jun 6. Revenues jumped 61% to all-time high of $26.5 million. That led to a 155% surge in net income.

Earnings per share came in at $0.58, which was an impressive 26 cents higher than the Zacks Consensus Estimate. Mitcham has now surprised in 4 of the past 5 quarters.

Estimates Look Great

Normally when a company issues additional shares, which Mitcham did in late June, you would see estimates trickle lower due to the dilution. But, analysts have been raising estimates, viewing the additional capital as a bigger positive than the additional shares are a negative.

Full-year forecasts for this fiscal year are up 16 cents, to $1.21 since the earnings release and subsequent stock offering. Next year's projections jumped 58 cents, to $1.83.

Last year Mitcham made just 0.34 per share, which means earnings should grow over 400% over the next 2 years.

Valuations are Cheap

On top of the aggressive growth story, shares are also showing some very good valuations. The forward P/E is just 16 times right now. MIND's price to sales looks high, above 2 times, but that is about average for the industry. Shares are at 1.8 times book value.

The Chart

Sure the shares of MIND have been on a surge, but take a look at the earnings trend that has driven that move. Additionally, estimates are at the highest level in 5 years, yet shares are still well below the high points during that time. Looks like there is plenty of upside for this Zacks #1 Rank (Stong Buy).