Fushi Copperweld, Inc. (FSIN) saw sales rebound in the fourth quarter on China’s continuing growth. The stock is cheap, trading at just 9.3x forward earnings.
Company Description
Fushi Copperweld is a Chinese-based manufacturer of copper-cladded bi-metallic engineered conductor products used in the electrical, telecommunications, transportation, utilities and industrial industries.
The company has manufacturing facilities in China, England and Tennessee.
Fushi Surprised By 25.9% for the Fourth Quarter
On Mar 10, Fushi reported its fourth quarter results and beat by 7 cents. Earnings per share were 34 cents compared to the Zacks Consensus of 27 cents.
Revenue jumped 25.9% to $51.7 million from $41.1 million in the year ago quarter as copper prices rebounded sharply from the big sell-off in early 2009.
The company also saw strong demand in China for its CCA products, particularly RF cable to support the ongoing 3G network buildout and expansion into the utility market.
The Dalian, China facility saw volume increase 27.1% compared to the fourth quarter of 2008. Gross margins increased at both the Dalian and the Fayetteville, Tennessee facility due to an absence of the extreme volatility witnessed in raw material prices in late 2008 as the global economy ground to a halt.
For all of 2009, revenue fell to $182.9 million from $221.4 million in 2008 due to the global recession.
Outlook for 2010
Fushi benefited from Chinese growth in 2009 and is looking to parlay that growth into continuing improvement in 2010.
For the first quarter, the company expects earnings per share between 22 and 24 cents. For 2010, earnings per share are expected between $1.20 and $1.25.
2010 Zacks Consensus Estimate Jumps
In response to the earnings report, the Zacks Consensus for 2010 jumped 5 cents to $1.25, which is at the upper end of the range.
Analysts expect EPS of 29.7% over 2009. They also see 5-year sales growth of 45.5%.
Value Fundamentals
Fushi Copperweld is a Zacks #1 Rank (strong buy). It has a price-to-book ratio of 1.4, well within the normal value parameters. The company also has an outstanding 5-year return on equity (ROE) of 21.9%.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
