Zacks Investment Research upgraded Columbus McKinnon Corporation (CMCO) to a Zacks Rank #1 (Strong Buy) on March 15, 2013. The stock prior to this upgrade carried a Zacks Rank #2 (Buy).
Why the Upgrade?
Following the release of its fiscal third quarter 2013 (ended December 31, 2012) financial results on January 25, 2013, the shares of Columbus McKinnon surged 18.7% while the stock reached a new 52-week high price of $20.83 on February 20, 2013.
The company’s earnings per share in the quarter grew 11.4% year over year and settled at 49 cents. This rise also represented roughly a 69% increase over the Zacks Consensus Estimate of 29 cents. The surge can be attributed to a healthy revenue performance, with an improvement recorded at 7.3%, on the back of solid businesses in the emerging markets, particularly in China.
Gross profits grew 13.5% while margins at 28.6% were 160 basis points above the year-ago margins. Both cost of goods sold and operating expenses inched up marginally in the quarter. It was the fall in interest expense, a rise in its investment income and lower tax expenses that largely contributed to the net results for Columbus McKinnon.
Six straight quarters of solid earnings surprise by Columbus McKinnon with an average of 38.8% in the last four trailing quarters, raise our optimism of solid earnings results in the quarters ahead. The Zacks Consensus Estimate for fiscal 2013 is $1.51, reflecting a year-over year increase of 18.4%.
Other Stocks to Consider
Other stocks worth a look in the industry are Alamo Group, Inc. (ALG), CNH Global NV (CNH) and Deere & Company (DE), each holding a Zacks Rank #2 (Buy).
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