The Middleby Corporation
) is set to report fourth quarter 2012 results on Feb 26. Last
quarter it posted a 4.6% positive surprise. Let's see how things
are shaping up for this company.
Growth Factors this Past Quarter
Middleby has been largely hurt by the economic downturn in
Europe, considering that a significant portion of its revenue is
generated in that part of the world. Also, due to its operations
in various regions outside the US, the company is exposed to
foreign currency risks, which impacted the revenue negatively in
the third quarter. However, recent acquisitions of Viking Range
and Nieco Corporation helped Middleby stabilize the above
negative effects and increase the revenue.
Our proven model does not conclusively show that Middleby is
likely to beat earnings this quarter. This is because a stock
needs to have both a positive ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1, 2 or 3 for this to happen. This is not the
case here as you will see below.
Negative Zacks ESP:
The Earnings ESP is 2.8%.This is because the Most Accurate
estimate stands at $1.73 while the Zacks Consensus Estimate is
higher at $1.78. This comes to a difference of -2.8%.
Zacks #3 Rank (Hold):
Middleby's Zacks Rank #3 (Hold) lowers the predictive power of
ESP because the Zacks Rank #3 when combined with a negative ESP
makes surprise prediction difficult. We caution against stocks
with Zacks #4 and #5 Ranks (Sell rated stocks) going into the
earnings announcement, especially when the company is seeing
negative estimate revisions momentum.
Other Stocks to Consider
Here are some other general industrial companies you may want
to consider as our model shows that they have the right
combination of elements to post an earnings beat this quarter:
Altra Holdings Inc.
), Earnings ESP of 4.7% and a Zacks Rank #1 (Strong Buy)
Avery Dennison Corporation
), Earnings ESP of 1.8% and a Zacks #1 Rank (Strong Buy)
), Earnings ESP of 1.4% and a Zacks #2 Rank (Buy).
ALTRA HOLDINGS (AIMC): Free Stock Analysis
AVERY DENNISON (AVY): Free Stock Analysis
GRACO INC (GGG): Free Stock Analysis Report
MIDDLEBY CORP (MIDD): Free Stock Analysis
To read this article on Zacks.com click here.