Titan International Inc.
) started out the year on fire, posting record results in Q1 in
what is expected to be a strong year. Yet investors have been
selling the shares since May, making this Zacks #1 Rank (Strong
Buy) a bargain with a forward P/E of 7.9.
Titan manufactures wheels, tires and assemblies for big equipment
makers in agriculture, construction, and mining sectors as well as
for consumers for all-terrain vehicles.
Titan Crushed The Consensus In Q1
On Apr 25, Titan did not disappoint. It reported first quarter
results which blew by the Zacks Consensus Estimate by 50%. Earnings
per share were 78 cents compared to the consensus of 52 cents. It
was the third beat in the last four quarters.
Sales soared 65% to a record $463.1 million from $280.8 million a
year ago. It was boosted by the 2011 acquisition of the Goodyear
Latin American farm tire business which had sales of $90.3 million
in the quarter.
Strong demand also continued in the agriculture and
Business Expected To Remain Strong
Over the last 6 months, Titan's CEO, Maurice Taylor, has been
outspoken about how great business has been for the company.
"Titan's mining service business is a hot market. We have just
opened a facility in the oil sands in Canada and already are
receiving the demand to double the facility," he said.
"Our partner in the oils sands is Saskatoon Wholesale Tire and they
have never seen anything like this. In order to meet demand, all of
Titan's factories will be hiring and expanding operations," he
Zacks Consensus Estimate for 2012 Is Still Rising
In the last month, 1 estimate has been revised higher for 2012,
pushing the Zacks Consensus Estimate up another 6 cents to $2.58
Check out the nice upward trajectory of the consensus estimates in
the last few years. This is exactly what you want to see the
consensus estimates look like. It is moving higher and to the
This is huge earnings growth of 70.6% over 2011 wherein the company
made just $1.51.
Tons of Value
Shares have taken a sharp dive in the last 6 weeks. This has
created an opportunity for investors looking to get a value stock
that also has growth.
In addition to a P/E under 10, Titan has other solid value
It has a price-to-book ratio of just 1.9. A P/B ratio under 3.0 is
the cut-off I use for value.
Titan also has a price-to-sales ratio of 0.5. A P/S ratio under 1.0
usually indicates a company is undervalued.
On top of value, Titan also has a 1-year return on equity (ROE) of
25.2%. That is much higher than the average of the S&P 500 at
With the stock sell-off, value investors might want to take a
second look at Titan.
Tracey Ryniec is the Value Stock Strategist for
. She is also the Editor of the Turnaround Trader and Insider
Trader services. You can follow her on twitter at
TITAN INTL INC (TWI): Free Stock Analysis
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