Nordson Corporation - Aggressive Growth

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Nordson Corporation ( NDSN ) sees higher estimates following several beats making the stock a Zacks #2 Rank (Buy).

Company Description

Nordson Corporation is one of the world's leading producers of precision dispensing equipment that applies adhesives, sealants and coatings to a broad range of consumer and industrial products during manufacturing operations. The company also manufactures technology-based systems for curing and surface treatment processes. Headquartered in Westlake, Ohio, Nordson has more than 3,800 employees worldwide, and direct operations and sales support offices in thirty countries. The company was founded in 1935.

Nordson Corporation Tops Earnings Estimates in Six of Last Seven Quarters

Nordson Corporation has topped earnings estimates in six of the last seven quarters. Over the course of the last seven quarters, the company has topped the Zacks Consensus Estimate by an average of $0.04 or almost 7.5%. The stock moved lower following four of seven reports, including two large moves following the earnings miss and the subsequent quarter.

The lone miss occurred in August of 2011 when the company reported earnings for the July 2011 quarter. The eight cent miss was a 9% negative earnings surprise and caused the stock price to move lower by a little more than 10%.

Nordson Corporation Most Recent Reported Earnings

On February 23, 2012 the company reported revenue of $276 million, roughly $2 million ahead of the Zacks Consensus Estimate and up from $271 million reported in year ago quarter. In addition, earnings per share came in at $0.62, $0.02 higher than the Zacks Consensus Estimate of $0.60. The beat of 3.3% was the smaller than the beat in the previous quarter of 6%, but the stock moved higher by 5% compared to a 12% slide following the October 2011 earnings report.

Nordson Corporation Sees Earnings Estimates Increase

Following the most recent earnings release, Nordson Corporation has seen its earnings estimates move higher. In March 2012 the Zacks Consensus Estimate was calling for 2012 earnings of $3.18. Following the most recent beat of $0.02, estimates for the year moved higher by $0.07 to $3.25.

Valuations

The valuation picture for Nordson Corporation shows what you would expect from an industry leader. The trailing and forward PE of 16x is higher than the industry average of 12x and 10x respectively. The price to book multiple appears a little lofty at 6.2x compared to an industry average of 2.2x and the price to sales multiple of 2.8x is well ahead of the 0.8x industry average. This sort of valuation will likely not attract any value investors, but aggressive growth investors will see that there is room for multiple expansion.

The Chart

The price and consensus chart shows how the stock closely followed the movement of the future earnings estimates throughout much of 2099 and 2010 and early 2011. The stock has seen some compression of its multiples in late 2011 but has since seen a recovery in the form of higher earnings estimates. Nordson Corporation is Zacks #2 Rank (Buy).

Nordson Corporation - ticker NDSN> <P ALIGN=

Brian Bolan is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor service

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NORDSON CORP ( NDSN ): Free Stock Analysis Report
 
NORDSON CORP ( NDSN ): Free Stock Analysis Report
 
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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 , Investing Ideas , Stocks

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