Titan Machinery Inc. (TITN): Zacks Rank Buy

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Everything is coming up roses for farmers and those who supply them. Titan Machinery Inc. (TITN), which operates agriculture retail stores, recently reported fiscal Q4 results and blew by the Zacks Consensus Estimate by 58%. Even as shares soared, this Zacks #2 Rank (Buy) is still a value with a forward P/E of just 12.1.

Titan Machinery operates a network of 96 full service agricultural and construction equipment stores in North Dakota, South Dakota, Minnesota, Iowa, Nebraska, Wyoming, Wisconsin, Colorado and Montana and 10 European dealerships in Romania and Bulgaria. Two of the American stores are outlet stores.

The company represents various of CNH's brands including, among others, Case IH, New Holland Agriculture, New Holland Construction, and Case Construction.

Titan Crushed the Fourth Quarter

On Apr 11, Titan reported its fourth quarter and full year results and blew by the Zacks Consensus by 31 cents. Earnings per share were 84 cents compared to the consensus of 53 cents.

Revenue soared 64.9% to $607 million from $368.1 million in the fiscal fourth quarter of 2011.

Equipment sales led the way, surging 66% to $517.1 million from $310.9 million in the prior year's quarter. However, parts sales and services also saw strong gains in the quarter.

For the year, the company saw record revenue which jumped 51.6% to $1.7 billion from $1.1 billion in fiscal 2011.

Bullish Guidance for Fiscal 2013

The company saw strong sales in the fourth quarter as a result of expanding farming income and improvement in the construction equipment market.

Those trends are expected to continue into fiscal 2013.

It expects another year of record revenue in the range of $1.95 billion to $2.1 billion.

Earnings per share are forecast between $2.55 and $2.75.

Fiscal 2013 Zacks Consensus Estimate Jumped

The analysts are still revising their estimates from the recent beat, but the fiscal 2013 Zacks Consensus Estimate has jumped to $2.65 from $2.01 in the last week.

That is, obviously, right in the middle of the company's guidance range.

That's earnings growth of 21.5% as the company made $2.18 in fiscal 2012.

Shares Soar To New Highs

Shares have taken off since the earnings report to new 52-week highs.

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But there is a surprising amount of value still in the stock.

In addition to a P/E under the average of the S&P 500, it has a price-to-book of 2.1. A P/B ratio under 3.0 usually means there's value.

It also has a cheap price-to-sales ratio of 0.4. A P/S under 1.0 can indicate a company is undervalued.

Titan is a an excellent way to play the rise in farming incomes and the hot agriculture sector, especially in the United States. With Titan, investors get both a value and a growth play.

This Week's Value Zacks Rank Buy Stocks

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Manufacturing is stronger than people think. Textron Inc. (TXT) is expecting double digit sales growth in 2012 on the back of strong manufacturing in several key subsidiaries. This Zacks #1 Rank (Strong Buy) is a value stock with a P/S ratio of just 0.7. Read the full article.

Double digit earnings growth is still on the agenda for PACCAR (PCAR) in 2012. The truck manufacturer will soon report first quarter results. Will it surpass last quarter's record revenue? This Zacks #1 Rank (Strong Buy) still has value with a forward P/E of 13.4. Read the full article.

Agriculture stocks are flying below the radar. Is it time to buy? Agrium Inc. (AGU) posted a record 2011 as agriculture fundamentals remained strong. Yet this Zacks #1 Rank (Strong Buy) is trading with a forward P/E of just 9.1. 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.

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