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Park-Ohio Holdings - Aggressive Growth
4/3/2012 1:00:00 AM
Park-Ohio Holdings Corp ( PKOH ) is a Zacks #1 Rank (Strong Buy) after posting nine straight upside surprises in as many quarters and getting higher estimates for 2012.
Park-Ohio Holdings Corp. engages in the industrial supply chain logistics and diversified manufacturing business in the United States, Asia, Canada, Mexico, and Europe. The company operates in three segments: Supply Technologies, Aluminum Products and Manufactured Products. The company was founded in 1961 and is based in Cleveland, Ohio.
PKOH Tops Expectations For Nine Straight Quarters
PKOH has beaten the Zacks Consensus Estimate in each of the last nine quarters. Over the course of the last six beats, Wall Street got wowed by results that topped expectations by as much as 105%.
These huge beats were enough to move the stock substantially, as the 105% beat moved the stock 21% and a 97% beat two quarters prior moved the stock 23%. In between those two huge beats there was the June 2011 quarter which beat expectations by $0.22 or 46%. This time, however, the stock fell 5% following the report.
PKOH Recently Reported Earnings
On March 5, 2012 the company reported revenue of $234 million roughly $21 million less than the Zacks Consensus Estimate and higher than the $220 million reported in the year ago period. EPS of $0.64 was $0.14 ahead of the estimate or a 28% beat.
Earnings Estimates Bumped Up
Following the most recent earnings report, analysts bumped up their earnings estimates for 2012. The Zacks Consensus Estimate for 2012 EPS moved from $2.85 in February 2012 to the current level of $3.00.
PKOH trades at a significant discount to the industry average on several key metrics that aggressive growth investors look to. A trailing twelve month PE of 7x is well below the 19x industry average but a 6.6x forward PE is right in line with a 6.8x industry average. At a less than half the industry average of 6.45x, PKOH's price to book is a significant discount at 3.6x. Finally, the metric that is most telling is price to sales. At 0.25x PKOH is well below the 6x industry average and could trade at this level due to the low number of covering analysts.
When we look at the chart, we see a stock that participated in the recent market rally, but seemingly only the first part of it. While the stock is comfortably above the 200 day moving average it has been stuck in a tight range. More analyst coverage could bring more institutions to this stock which carries some very attractive valuation metrics. PKOH is a Zacks #1 Rank (Strong Buy).
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
PARK OHIO HLDNG ( PKOH ): Free Stock Analysis Report
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