MTS acquisition set to boost earnings

Article Excerpt

MTS SYSTEMS CORP. $56 (Nasdaq symbol MTSC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 18.0 million; Market cap: $1.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.1%; TSINetwork Rating: Average; paid $80.0 million for E2M Technologies B.V. Based in the Netherlands, E2M makes hydraulic platforms for flight simulators and testing equipment for amusement park rides. The new operations will probably expand MTS’s earnings per share (before unusual items) from $1.98 in fiscal 2018 (fiscal years end September 30) to $2.66 a share in fiscal 2019. However, the stock trades at a somewhat high 21.1 times that forecast. As well, expanding by acquisition adds risk. MTS Systems is still a hold. hold. …

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