Why II-VI, Inc. Gained 23% in January 2017

By Anders Bylund Markets Fool.com

What happened

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Shares of II-VI(NASDAQ: IIVI) rose 23.1% in January of 2017, according to data from S&P Global Market Intelligence.

So what

The maker of opto-electronic components and engineered materials reported second-quarter results near the end of January, sending share prices more than 12% higher overnight. As February rolled around, share prices had delivered a soaring 82%, 52-week performance.

IIVI data by YCharts.

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Now what

Image source: Getty Images.

II-VI has delivered a consistent stream of earnings surprises since the summer of 2014, and the last three earnings beats were particularly impressive. The stock is exploring all-time highs these days, and management's comments on the second quarter pointed to even greater gains ahead.

"Our bookings in the communications end markets were unprecedented," said II-VI CEO Chuck Mattera, referring to a segment that produces about 45% of II-VI's total revenues. "Those bookings and ongoing customer inquiries further validate our differentiation, the important role we play in the industry ecosystem, and underpin our confidence in our ability to deliver a strong FY2017."

The company is also leaning back against a record-level order backlog. Nearly all of the year-over-year sales growth was organic, and II-VI is currently doing research and infrastructure improvements to tackle rising demand for 3D sensor solutions.

I'll note that the soaring stock price may have lifted II-VI out of a value investor's comfort zone, but it's also a highly volatile stock that lets you buy on temporary dips. Whatever your investing style, it's a good idea to keep an eye on this ticker.

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Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends II-VI. The Motley Fool has a disclosure policy.