) is a Zacks #1 Rank (Strong Buy) after posting positive earnings
surprises and accelerating earnings momentum.
Dorman Products, Inc. supplies automotive replacement parts,
fasteners, and service line products primarily for the automotive
aftermarket. The company, formerly known as R&B, Inc., was
founded in 1978 and is headquartered in Colmar, Pennsylvania.
DORM Exhibits Earnings Momentum
DORM has had back to back positive earnings surprises. The company
reported earnings of $0.82 for the September 2011 quarter, $0.06 or
7.9% higher than expectations. The December 2011 quarter saw
earnings of $0.87, $0.11 ahead of the Zacks Consensus Estimate for
a 14.4% earnings beat.
The year before saw the company beat estimates, but it lacked the
increase in momentum that we saw in 2011. A beat of 26% in the
September 2010 quarter was followed up by a smaller beat of 22% in
December 2010. The beat was smaller on both percentage and absolute
DORM Recently Reported Earnings
On February 21, 2012 the company reported revenue of $139 million
roughly $5 million more than the Zacks Consensus Estimate and
higher than the $123 million reported in the year ago period. EPS
of $0.87 was $0.11 ahead of the Zacks Consensus estimate and higher
than the $0.67 reported in the year ago period.
Earnings Estimates Bumped Up
Following the most recent earnings report, analysts bumped up their
earnings estimates for 2012. The Zacks Consensus Estimate for 2012
EPS moved from $3.36 in January 2012 to the current level of $3.52.
DORM trades at very reasonable valuations. A 15x multiple for
trailing twelve months is a little above the 12.7x multiple for the
industry average. Looking forward, however, the 13.2x multiple
compares more favorably to the 14.8x industry average. Price to
book shows a slight premium in valuation of DORM as does price to
A quick look at the six month chart shows that DORM is in a nice
upward channel. It has tested both highs and lows in the channel
and has not broken out of the channel. Momentum investors will
appreciate the accelerating earnings momentum, low valuation and
solid chart formation for DORM. DORM is a Zacks #1 Rank (Strong
Brian Bolan is the Aggressive Growth Stock Strategist for
Zacks.com. He is also the Editor in charge of the
Run Investor service
DORMAN PRODUCTS (
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