It’s one of the best-performing stocks in my portfolio.
But when I first recommended it … Mr. Market was asleep!
The company specializes in the extreme testing of electronics — including everything from semiconductors to automotive parts and telecommunications gear.
It’s a microcap with a market cap less than $500 million, so there’s little to no coverage of it on Wall Street.
In fact, only one analyst was covering it.
Then Nick Grant took over as CEO. And boy did he wake the company up.
The company is inTEST Corp. (NYSE: INTT). And since we added it to the portfolio, shares have rocketed up over 131%.
How Nick Grant turned a sleepy company into a huge winner is the reason I focus on CEOs.
Over my 40-year career, I’ve found the biggest driver of making money is finding and investing alongside great CEOs.
A great CEO running a mediocre business can turn it into a huge moneymaker.
But when a great CEO takes control of a great business … the sky’s the limit.
That’s what happened back in August of 2020, when Nick became CEO of inTEST.
Rapid Turnaround for Semiconductor Supplier InTEST
InTEST was the supplier of choice for companies that needed equipment to test semiconductors.
However, prior to Nick, inTEST’s revenue and growth were growing at a snail’s pace.
Nick was hired to jump-start the business and that’s what he did.
He began transforming the company into an industry leader.
His experience and contacts in the test and measurement industry was vast. Nick had a solid reputation for being a no-nonsense guy that makes things happen.
He figured it was cheaper for the company to buy innovation rather than create it.
So he started buying competitors and other businesses in the industry.
In 2021, he made three acquisitions that added more than $20 million to the top line.
And he was just getting started.
In fact, acquisitions became a cornerstone of inTEST’s growth.
Nick built a team of merger and acquisition specialists, an “A-team” of dealmakers, and set them loose.
When Nick took over as CEO in August 2020, revenue was just $54 million.
As of the end of 2022, due to smart acquisitions and excellent execution, revenue has doubled to close to $120 million.
The latest projections are for revenue to double again to $250 million in the next two years.
If inTEST hits its target, which I believe it will, that would work out to a compounded annual growth rate of 30%!
Net earnings are projected to triple from where they were when Nick became CEO.
If there was a CEO Hall of Fame, my first inductee would be Nick Grant.
Patient Profits
I’ve been watching Nick’s performance over the past few years and was waiting for the right time to recommend it.
In June 2021, inTEST was trading as high as $18 per share.
Based on my research, the stock price was trading way above the worth of the business.
So, I patiently watched and waited for an opportunity to buy shares.
Because buying even a great business at too high a stock price produces lousy results.
A little more than one year later, in September 2022, my patience was rewarded.
Mr. Market had cut the stock price by more than half, to around $8 per share.
The stock was underpriced based on what inTEST was worth, so I recommended it to my subscribers.
It didn’t take long for Mr. Market to realize its mistake of offering inTEST at a bargain price.
Just seven months after we recommended it, inTEST’s stock made an all-time high.
The stock is trading around $19 per share, for an open gain of more than 130%.
Now you can appreciate why I like to partner with great CEOs.
With apologies to Willie Sutton, it’s because that’s where the money is.
InTEST isn’t trading at a bargain price right now … however, another stock I just added to my portfolio is.
This company I just recommended has a CEO that is also the founder and is knocking the lights out.
I recently met him and we talked at length about his vision and his plans for the company.
After speaking to him, I can confidently say: This CEO is the real deal.
And just like in the case of inTEST, Mr. Market is sleeping at the switch.
The stock is currently trading for less than $5 a share.
My research is telling me that the share price should be much higher.
If you missed inTEST, you’re in luck … because this company just pulled into the station.
Now’s the time to jump on.
If you want to know more about this CEO, and why my research is telling me it’s not going to stay a $5 stock for long… Just click here for the details now.
I guarantee you’ll like what I have to tell you.
Regards,
Charles Mizrahi
Founder, Alpha Investor
I’ve been warning that the economy would start to show signs of cooling. The Conference Board is flashing a 99% probability of a recession.
We’re not there yet, but we’re getting close.
The official March jobs data from the Bureau of Labor Statistics came in this week, and they weren’t great.
U.S. job openings fell to 9.6 million. That might sound like a big number, but it’s close to a two-year low.
And remember, this is March data, not April. We haven’t seen the effects of the banking scare in the hiring data yet. When the April data comes out, I suspect the dip will be even worse.
Job Openings
Layoffs are also trending slightly higher. About 1.8 million people were laid off in March, up from about 1.6 million in February and 1.4 million in March 2022.
That’s by no means a sign of a labor market in distress. But it’s trending in the wrong direction.
Interestingly, fewer people are taking a line from Johnny Paycheck and saying: “Take this job and shove it.”
Roughly 3.8 million people quit their job in March, which is down from 4.4 million in March 2022.
Again, this isn’t “blood in the streets.” And the labor market remains pretty darn tight by historical standards. But again, we’re talking about the trend, and the trend is most definitely moving in the other direction.
Meanwhile, JPMorgan buying out First Republic Bank did very little to calm investors’ nerves. The SPDR S&P Regional Banking ETF (NYSE: KRE) continues to drop, despite JPMorgan’s move. The shares were down about 9% over Monday and Tuesday.
Now, let me be clear. I don’t believe that we’ll have a long chain of additional bank failures.
I do expect we’ll have a few more. But the Federal Reserve’s special lending facility, which allows banks to trade in underwater government bonds for cash, should do a decent job of preventing Armageddon.
That said, the banks don’t have to blow up to cause us a lot of hurt. When banks are technically insolvent (or close to it), they’re zombies. They’re not alive … but they’re not dead. They’re “undead,” essentially consuming capital without contributing anything to growth.
This is a tough environment to be running a business in. Which is why Charles Mizrahi’s emphasis on rock-star CEOs makes sense. You want someone with intelligence, hunger, integrity and — perhaps most importantly — grit.
This is a “roll up your sleeves” moment. So if you want to take advantage of the currently undervalued $5 stocks Charles has his eye on, my advice is: Don’t wait.
They won’t be undervalued for long.
Regards,
Charles SizemoreChief Editor, The Banyan Edge
