Crane Company
(
CR
) is still on track for a third year of double digit earnings
growth after reporting a record year in 2011. This Zacks #2 Rank
(Buy) also has attractive valuations with a forward P/E of just
12.2.
You might not know the Crane name, but the company has a long track
record of making useful products such as vending machines.
Founded in 1855, the company manufactures products in 5 business
segments including Aerospace & Electronics which makes landing
systems and electronics such as those on Mars Rovers and fighter
jets; Engineered Materials such as composites; Merchandising
Systems like vending machines; Fluid Control Systems; and Controls.
Fourth Quarter Sales Rise 10%
On Jan 23, Crane reported its fourth quarter and full year results.
Fourth quarter sales rose 10% to $632 million while full year sales
jumped 15% to $2.2 billion. For the quarter 7% of the gain came
from an increase in organic sales.
Fluid handling, the largest segment, saw the biggest sales gain of
the segments in the quarter, rising 14% to $297.5 million.
The order backlog grew to $778 million at the end of December 2011
compared to $768 million the year before.
Earnings actually missed on the quarter. EPS was 88 cents compared
to the consensus at 90 cents. It was the first miss in the last 8
quarters.
The year saw record earnings of $3.43 per share and margins which
expanded to 12.3% from 11% in 2010.
2012 Guidance
Crane is forecasting further growth in 2012.
Sales are expected to rise 3% to 5% with core sales increasing 5%
to 6%.
Earnings are projected to be in the range of $3.75 to $3.95, as all
segments are expected to see sales growth.
Zacks Consensus Estimates Rise
One estimate has moved higher for 2012 in the past 30 days. The
2012 Zacks Consensus Estimate has jumped $3.92 from $3.87 in the
last 3 months.
That is at the high end of the company's guidance range.
It is also earnings growth of 14.2%.
Valuations Still Solid
Crane usually trades with attractive valuations even when the share
price has been rising.
It continues to be a value stock with a P/E under the average for
the S&P 500.
However, it does have a price-to-book ratio of 3.4, which is a
little hotter than I'd like to see. I usually use a cut-off of 3.0
for value.
In addition, the company has a 1-year return on equity (ROE) of
19.8% which easily crushes the average of the S&P 500 of 13.4%.
Crane is a company that offers investors attractive value
fundamentals in addition to double digit earnings growth. That's a
magical combination.
This Week's Value Zacks Rank Buy Stocks
The Texas economy is still hot.
Conn's Inc.
(
CONN
), a specialty retailer with most of its stores in the Lone Star
state, is expected to post triple digit earnings growth in fiscal
2012. This Zacks #1 Rank (Strong Buy) is a growth stock that also
has value. It trades with a price-to-sales ratio of just 0.7.
Read the full article.
The transportation companies are at the front lines of the
resurgent US economy.
Saia Inc.
(
SAIA
) is expected to grow earnings by 65% in 2012. This Zacks #1 Rank
(Strong Buy) is also a value stock with a P/B ratio of only 1.2.
Read the full article.
I'm always looking for hidden gems.
FSI International
(
FSII
), a maker of wafer cleaning equipment, recently posted a big
earnings surprise for the fiscal second quarter. This Zacks #1 Rank
(Strong Buy) has both growth and value characteristics with a juicy
PEG ratio of just 0.6.
Read the full article.
The retreat of the crack spreads has caused havoc among the
refining stocks.
Delek US Holdings, Inc.
(
DK
) faces headwinds in 2012 as that spread comes back to earth. But
this Zacks #1 Rank (Strong Buy) is still cheap, with a forward P/E
of 6.9.
Read the full article.
Tracey Ryniec is the Value Stock Strategist for
Zacks.com
. She is also the Editor of the Turnaround Trader and Insider
Trader services. You can follow her on twitter at
@TraceyRyniec
.
CRANE CO (
CR
): Free Stock Analysis Report
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