CLARCOR Inc. (CLC) offers investors upside potential from a cyclical economic recovery, while offering some downside protection. The company’s growth is being driven by its engine/mobile business, which is experiencing a strong rebound. CLC’s environmental segment is the market leader in heating, ventilation, air conditioning filtration, navigation fuel filtration, and in-plant filtration, which helps limit the downside during economic slowdowns.
Growth and Income
The company is expected to grow its earnings per share 29% in fiscal 2010, 14% in fiscal 2011, and 10% over the next three to five years. The stock also offers investors a dividend yield of 2.1%.
This Zacks #2 Rank stock trades at 19.9x 2010 consensus EPS estimates and 17.4x 2011 consensus EPS estimates.
Business
CLARCOR Inc. provides filtration products and services to customers worldwide. It operates in three segments, including Engine/Mobile Filtration, Industrial/Environmental Filtration, and Packaging.
Fiscal Second-Quarter Results
Second-quarter sales were $257.9 million, up 12% from the year-ago quarter. CLARCOR earned $0.47 per share, up 42% year-over-year and 6 cents ahead of the Zacks Consensus Estimate.
Chairman and CEO Norm Johnson said, “Our improved cost structure positions us well to fully capitalize on the profit potential of our future growth opportunities both domestically and abroad.”
The company also increased its outlook for fiscal year 2010. It now expects earnings per share of $1.70-$1.85, up from its previous guidance of $1.55-$1.70 per share.
Estimates
After the company’s better-than-expected Q2 report, the Zacks Consensus Estimate for fiscal 2010 increased 11 cents, or 6.5%, to $1.81. The fiscal 2011 Zacks Consensus Estimate climbed 9 cents, or 4.6%, to $2.06.
The Chart
CLC shares are up over 27% in the last year. The stock has bounced off its 200-day moving average three times in the last seven months, as it marched higher. The stock hit a new 52-week high after reporting strong Q2 results on June 15. Nevertheless, CLC hasn’t given back those gains and sold-off with the rest of the market. It is now about 9% off its recent highs.
