Titan International, Inc. (TWI) is expecting 2012 to be its best year ever. That’s a bold statement given all of the global economic uncertainty hanging in the air. But this Zacks #2 Rank (Buy) does have the magic combination of both growth and value, with earnings expected to rise by the double digits in 2012 and a forward P/E of just 9.3.
Titan manufactures wheels, tires and assemblies for big equipment makers in agriculture, construction, and mining sectors as well as for consumers for all-terrain vehicles.
2012 To Be the Best Ever?
On Dec 9, the company announced its 2012 sales projections expecting a rnage of $1.7 billion to $1.9 billion. That is at least a 21% increase from the 2011 guidance of $1.4 billion.
“We have had a great year and we are forecasting 2012 to be our best year based on the conditions I see today,” said Maurice Taylor, Chairman and CEO.
“The agriculture market remains strong, earthmover is booming and we see great opportunities in the export market,” he added.
Double Digit Earnings Growth for 2012
Given the bullishness from Titan, it’s not surprising that the analysts are jumping on the bandwagon for 2012.
3 estimates have moved higher and 1 has gone lower for 2012 in the last 30 days.
This has pushed the 2012 Zacks Consensus Estimate up to $2.26 from $2.19 in that time.
That is another year of double digit earnings growth.
In the last 3 years, earnings have skyrocketed.
- 2010 Earnings: 49 cents
- 2011 Expected Earnings: $1.46- EPS growth of 197%
- 2012 Expected Earnings: $2.26- EPS growth of 56%
Titan is scheduled to report fourth quarter results on Feb 23 so we’ll get another update then. It has surprised on the Zacks Consensus Estimate 5 quarters in a row.
Still a Lot of Value
You’d think with all this good news, that Titan’s shares would be pretty hot.
But like a lot of stocks, it sold off over the summer of 2011 before hitting a new 52-week low in October. It has since rebounded off that level, but hasn’t retaken its prior highs.
But because of rising earnings estimates, that means the stock has attractive valuations.
In addition to a P/E under 10, which is under the average for the S&P 500 of 12.4, the company has a price-to-book of 2.3. A P/B under 3.0 usually indicates value.
Additionally, Titan has a really low price-to-sales ratio of 0.7. A P/S under 1.0 can mean that a company is undervalued.
Also, if you’re looking for other solid fundamentals, Titan has a stellar 1-year return on equity (ROE) of 20.2% which is well under the S&P 500 average of just 13.4%.
Investors will also get a small dividend, currently yielding 0.10% but they’re not buying the company for that. Titan is one of those rare growth stocks that also has all the value components.
Let’s see if it can live up to its own hype in 2012.
This Week’s Value Zacks Rank Buy Stocks
Barnes Group Inc. (B) has been growing earnings by the double digits since 2010. Not too shabby for a 154-year old company. This Zacks #1 Rank (strong buy) also has attractive valuations, with a forward P/E of 14. Read the full article.
Some of the transportation companies are still seeing double digit earnings growth. Ryder System, Inc. (R) raised full year guidance in October, despite the uncertain economic environment. This Zacks #1 Rank (Strong Buy) is a value stock with a forward P/E of 13.4. Read the full article.
The gold miners are cheap after investors fled the sector thinking the gold bull was over. Aurizon Mines Ltd. (AZK) is expected to grow earnings by 87% in 2012 after posting triple digit earnings growth in 2011. Yet this Zacks #1 Rank (Strong Buy) has a forward P/E of just 9.5. Read the full article.
Lincoln Electric Holdings, Inc. (LECO) is expected to post double digit earnings growth in 2011 and again in 2012. Shares of this Zacks #1 Rank (Strong Buy) have regained pre-Recession highs. Yet, the company still offers value with a forward P/E of 14.6. Read the full article.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at traceyryniec.
