Anixter International (AXE) saw plenty of strength entering 2011 and analysts matched that sentiment by raising estimates.
This Zacks #1 Rank (Strong Buy) has a great earnings trend and remains a solid value, in addition to its growth potential.
Company Description
Anixter is a global distributor of communication and security products, electrical and other related parts. The company also offers inventory management programs and $1 billion in inventory in 50 countries.
Earnings Up 131%
Anixter reported quarterly and full-year results on Feb 1. Fourth-quarter sales were up 18% on a year over year basis to just over $1.2 billion. Operating income jumped 31%, to $61.6 million.
Earnings per shares came in at $1.19, which beat the Zacks Consensus Estimate by 26 cents and was up from $0.50 a year ago. That marks a 131% year over year increase.
The CEO said that quarterly sales were stronger than expected and enough to overcome the season decline seen in the fourth quarter. Typically they see a sequential fall off due to holidays, but sales grew 3% from the third quarter.
Estimates Pop
Anixter said it has “increased confidence” heading into the new year and analysts agreed. The full-year average estimate for 2011 jumped 61 cents to $5.10. Next year’s projections are coming in at $5.84, up 71 cents.
Last year Anixter earned $3.93, which means the projected annual growth rates are now 30% and 14%, respectively.
Shares of AXE are trading at just 13 times forward estimates and with a 15% long-term growth rate, the PEG ratio is about 0.9. Both of those values show a solid value. The price-to-sales ratio of 0.4 times is in line with Anixter’s peer group.
The Chart
Long term earnings trends really paint the picture for a stocks recent history and its potential moving forward. You can see below that each annual consensus estimates not only increases incrementally each year, but analysts have kept raising those estimates as the year progresses. A very bullish signal.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service
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