Worthington Industries, Inc. - Value

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Worthington Industries, Inc. ( WOR ) is seeing an overall improvement in the U.S. economy. This steel processor recently surprised on the Zacks Consensus Estimate by 11.8%. This Zacks #2 Rank (Buy) has plenty of value, with a forward P/E of 12.

Worthington Industries is on the front lines in the recovery in manufacturing as it operates 79 facilities in 12 countries in the steel processing, metal framing and pressure cylinders markets.

The company makes pressure cylinders including propane tanks for gas grills, scuba tanks, camping cylinders. and hand torches. Its metal framing and ceiling grid systems are used in commercial and residential construction.

Fiscal Third Quarter Sales Rose 7.4%

On Mar 29, Worthington reported its fiscal third quarter results and surprised on the Zacks Consensus Estimate by 4 cents. Earnings per share were 38 cents compared to the consensus of 34 cents. It made 35 cents in the same quarter a year ago.

Sales rose 7.4% to $611.3 million from $569.4 million. However, this reflects replacement of revenue lost from the deconsolidation of the Metal Framing and Automotive Body Panels segments.

Excluding those operations, net sales rose 32% from a year ago due to acquisitions and higher average selling prices.

Steel Processing sales jumped 22% to $367.3 million over the year ago quarter. Volumes climbed 21%.

Pressure Cylinders' sales rose 38% from a year ago. It was boosted by the BernzOmatic, STAKO and Coleman fuel cylinders acquisitions and higher average selling prices.

Outlook for the Fiscal Fourth Quarter

Worthington still sees modest volume growth in the fourth quarter as the general economy improves.

"While automotive volumes in Steel Processing and related JVs appear to be gaining momentum, other end markets for Pressure Cylinders and Engineered Cabs are also showing some improvement and growth," said John P. McConnell, CEO.

Zacks Consensus Estimates Jump

Three estimates have moved higher for fiscal 2012 over the last 30 days pushing the 2012 Zacks Consensus up to $1.51 from $1.47 in that time.

That is earnings growth of juts 0.6% however.

But the analysts are more bullish for fiscal 2013. They are projecting earnings growth of 31%.

Plenty of Value

Worthington shares got hit hard in 2011's big late summer stock sell off. They haven't recovered to 52-week highs in 2012.

But there is plenty of value in the shares.

In addition to a P/E under 15, which is the cut-off I use for value stocks, Worthington also has a price-to-sales ratio of just 0.5. A P/S ratio under 1.0 usually indicated a company is undervalued.

The company also has an attractive price-to-book ratio of just 1.7. A P/B ratio under 3.0 can mean there is value.

Worthington also has other solid fundamentals, including a 1-year return on equity (ROE) of 16.9% which well above the S&P 500 average of 13.4%.

The company also rewards shareholders with a dividend, currently yielding 2.7%.

With Worthington, value investors are getting solid value credentials and by fiscal 2013, some growth to boot.

This Week's Value Zacks Rank Buy Stocks

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The Latin American banks look intriguing despite the chaos going on in Europe. Banco Latinoamericano de Comercio Exterior, S.A. ( BLX ) recently reported first quarter results and easily blew by the Zacks Consensus Estimate. This Zacks #1 Rank (Strong Buy) is also an attractive value stock, with a forward P/E of just 9.2. Read the full article.

Who cares about Europe? Eaton Corporation ( ETN ) recently reported record sales in the first quarter as strong U.S. demand more than made up for a slowing international market. This Zacks #1 Rank (Strong Buy) is still a value stock with a forward P/E of 10.7. Read the full article.

Men's Wearhouse Inc. ( MW ) has been defying the gloom and doom retail predictions since the Great Recession. The men's retailer is expected to post its third year of double digit earnings growth in fiscal 2012. This Zacks #1 Rank (Strong Buy) is also a value stock with a forward P/E of 12.8. Read the full article.

Tracey Ryniec is the Value Stock Strategist for Zacks.com . She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec .
 
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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.



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