Columbus McKinnon Corporation
) is a material handling products maker that recently reported a
robust fiscal first quarter, thanks to strong domestic demand. This
Zacks #1 Rank (Strong Buy) outperformed the Zacks Consensus
Estimate by 59.3% in the quarter, marking its fourth positive
earnings surprise over the past six quarters. With a price-to-sales
(P/S) ratio of just 0.5, CMCO is a compelling value pick.
Strong First Quarter
On July 19, Columbus McKinnon posted a three-fold year-over-year
surge in its profit to $8.4 million for the first quarter of fiscal
2013. Earnings of 43 cents per share crushed the Zacks Consensus
Estimate of 27 cents. Improved operating efficiency aided the
bottom line growth.
Revenues spiked 9.5% year over year to $153 million on strong
demand for its products in the U.S. and healthy order bookings
internationally. U.S. sales soared 18.5% to $88.1 million. However,
overseas revenues moved lower by 0.7% to $64.9 million due to
unfavorable currency exchange swings.
Backlog climbed 11% year over year to $109.9 million. Gross margin
increased to 28.6% from 25.5% a year-ago on efficiency gains and
The company expects continued growth despite the sluggish global
economy. The optimism stems from healthy order backlog and strong
demand across its end markets. Columbus McKinnon also expects to
benefit from its growth strategies, including acquisitions.
Earnings Estimates on the Rise
One out of three estimates has been revised higher in the last 30
days for fiscal 2013, pushing the Zacks Consensus Estimate up 8.2%
to $1.45 a share. This reflects a projected annualized growth of
A True Value Stock
Like many other stocks, Columbus McKinnon's shares tumbled amid
last year's summer selloff due to the fears of a slowing global
economy. Following that, the stock has bounced back and gained
roughly 11% so far this year. With its shares still trading below
its 52-week high of $18.02 (reached on Feb 16, 2012), there is much
room for upside.
Columbus McKinnon has a lot to attract investors seeking value. In
addition to having a low P/S, the stock has a forward P/E ratio of
just 10.2. It also has a price-to-book (P/B) ratio of 1.7. (A P/S
ratio lower than 1.0, a P/E below 15.0 and a P/B ratio under 3.0
generally indicate value). Moreover, the company has a 1-year ROE
of 17.6% which is higher than its peer group average of 14%.
Founded in 1875, Columbus McKinnon Corporation makes material
handling products and services for applications across a number of
commercial and industrial markets. Its offerings include electric
hoists, steel chains, jib cranes overhead cranes, shackles, lifting
hooks and ratchet binders. The company, which has a market cap of
roughly $285 million, markets its products to general and specialty
distributors, end users and original equipment manufacturers (OEMs)
under a host of brands.
COLUMBUS MCKINN (CMCO): Free Stock Analysis
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