MRC Global Inc.
), a Zacks #1 Rank (Strong Buy) distributor of machine tools and
accessories, reached a new 52-week high of $28.55 on December 4,
2012. The company is showing strong momentum right now, thanks to
solid third quarter results and the recently concluded acquisition
of Production Specialty Services.
MRC Global has long been acquiring assets with a clear intention of
expanding into different regions. Recently, the company signed
agreements to acquire assets of Production Specialty Services, Inc.
The transaction will enhance the company's position in Texas and
In addition to acquisitions, the company announced solid third
quarter financial results on October 26. Earnings per share of 61
cents beat the Zacks Consensus Estimate by 24% and rose by more
than 130% from the year-ago quarter.
Net sales soared 6% to $1.45 billion on the back of healthy North
American operations and increased infrastructure spending.
Earnings Estimates Move Higher
Over the last 60 days, the Zacks Consensus Estimate for 2012 gained
nearly 4% to $1.91 per share, as 5 of 6 estimates were revised
higher. As for 2013, the Zacks Consensus Estimate is up 4.7% to
$2.46 on 8 upward revisions out of 9 total estimates.
These estimates reflect year-over-year growth of 429.6% for 2012
and 28.8% for 2013.
Valuation & Technicals
MRC Global Inc. is currently trading at a forward P/E multiple of
14.8, a 3.0% discount from its peer group average of 15.2. On a P/S
basis, shares trade at 0.5x, versus the peer group average of 0.6x.
The company offers a ROE of 15.0%.
The last six months have been pretty good for the company as the
share price has trended 40% higher to $28.00. Solid returns and a
rising Zacks Consensus Estimate add to the company's
MRC Global Inc. is headquartered in Houston, Texas, and was founded
in 2006. It operates as a subsidiary of PVF Holdings LLC and
specializes in the distribution of pipes, valves, and fittings to
the energy industry worldwide. Prior to January 2012, the company
was popularly known as McJunkin Red Man Holding Corporation. It has
a current market capitalization of approximately $2.85 billion.
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