Gorman-Rupp Up to Strong Buy - Analyst Blog

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Zacks Investment Research upgraded Gorman-Rupp Co. ( GRC ) to a Zacks Rank #1 (Strong Buy) on Feb 11, 2014.

Why the Upgrade?

Gorman-Rupp reported impressive fourth-quarter 2013 financial results on Feb 7, 2014. Adjusted earnings per share in the quarter were 29 cents, up 38.1% year over year. The top-line result also surpassed the Zacks Consensus Estimate of 26 cents by 11.5%.

Sales were $91.6 million in the fourth quarter, up 3.3% year over year. The increase can be attributed to 6.2% increase in domestic sales, partially offset by 1.6% fall in international sales. Domestic water supply projects increased sales in water end markets. Order backlog at the end of the quarter was $182.2 million, reflecting an increase of 27.1% from the year-ago quarter.

Gross margin in the quarter was 23.4%, up 210 basis points year over year. Selling, general and administrative expenses recorded a slight decline of 1.4%. Operating profit increased 51.4% while margin was 8.9% versus 6.0% in the year-ago quarter.

Strong fourth-quarter 2013 results as well as a positive average earnings surprise of 9.7% make us optimistic of first-quarter 2014 results. We have an Earnings ESP of +7.4% for the first-quarter 2014 and +6.0% for 2014.

Also, in the last 30 days, the Zacks Consensus Estimate for Gorman-Rupp has increased by 0.8% to $1.33 for 2014 and by 2.6% to $1.60 for 2015.

Other Stocks to Consider

Gorman-Rupp Co. is a $788 million diversified machinery company. Other stocks worth considering in the industry include Middleby Corp. ( MIDD ), Altra Industrial Motion Corp. ( AIMC ) and Barnes Group Inc. ( B ), all of which hold a Zacks Rank #2 (Buy).



ALTRA HOLDINGS (AIMC): Free Stock Analysis Report

BARNES GRP (B): Free Stock Analysis Report

GORMAN RUPP CO (GRC): Free Stock Analysis Report

MIDDLEBY CORP (MIDD): Free Stock Analysis Report

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Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AIMC , B , GRC , MIDD

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