The Pull Of Intermagnetics

For an outfit with only $46 million in sales, Intermagnetics General has some big-league companies as prime customers, including the federal government. Little wonder, then, that the stock has been a superperformer, shooting to 10 from 4 in November. True, a bevy of small-cap stocks have been big winners of late. But IG is on a fast earnings-growth track, and at least one big investor thinks the stock has a lot more speed in it.

Based on earnings growth, this investment manager sees IG rising to 20 over the next 12 months. He estimates that the company will earn 40~ a share this year and 55~ to 65~ a share in 1992, vs. last year's 13~, with sales ballooning to $60 millon this year and $75 million next year, vs. 1990's $46 million.

IG makes superconducting wire and superconducting magnet systems used in magnetic-resonance imaging (MRI) systems. Its principal customers are Philips, which accounts for 40% of IG's sales, and General Electric, which contributes some 20% of sales and also owns 20% of IG's wire unit. Toshiba is another big customer, representing 12% of sales.

IG's government business is just 10% of sales, but that could expand rapidly. The company has been chosen by the government's Superconducting Supercollider Laboratory to be one of seven suppliers of superconducting wire cable in a $20 million contract. The SSCL is designing a 53-mile accelerator ring as part of an ambitious $650 million project to recreate the origins of the universe. One analyst says that if the SSCL gets adequate funding, IG's participation could mean additional sales of $75 million to $100 million.

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