Looking for late-cycle stock? ParkOhio (PKOH) has been hot lately, coming off of its eighth consecutive earnings surprise.
Company Description
ParkOhio offers supply chain logistic services and is a manufacturer of highly engineered products. The company has 31 manufacturing sites and 47 logistics facilities.
Big Surprise
On Nov 2 ParkOhio reported its third-quarter results that included a 20% bump in net sales, to $244 million. There is only 1 analyst reporting to Zacks and the top line exceeded his expectations.
Net income was $8.2 million, which made earnings per share $0.70. The analyst polled by Zacks was expecting just $0.34, giving ParkOhio its eighth consecutive earnings surprise.
Estimates Surge
The forecast for this year jumped above and beyond just accounting for the surprise, rising 54 cents, to $2.61. Next year’s estimate is up 67 cents, to $2.85.
Last year ParkOhio made $1.37 per share, which puts the projected growth rates at 91% for 2011 and 9% in 2012.
Shares of PKOH are going for just 7 times the 2012 estimate and just 0.2 times sales. So there is plenty of value as well.
The Chart
PKOH did well immediately following the earnings release, but stalled out when the market began fretting of EU and recession worries a couple weeks ago.
However, shares rebounded nicely and are back to the recent high. PKOH is very sensitive to the long-term recovery, so if that sentiment improves or worsens, it will show up in the share price.
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
