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Gorman-Rupp a Stock Worth Buying

Zacks Equity Research

Zacks Investment Research upgraded Gorman-Rupp Co. (GRC) to a Zacks Rank #1 (Strong Buy) on Apr 29, 2014. Going by the Zacks model, companies holding a Zacks Rank #1 have strong chances of performing better than the broader market.

Why the Upgrade?

Gorman-Rupp kept its earnings beat streak alive in first-quarter 2014, while posting a positive earnings surprise of 35.71%. The company’s average positive earnings surprise for the trailing four quarters is 21.17%. A brief discussion of first-quarter 2014 results is provided below:

Earnings per share in the quarter were 38 cents, up from 26 cents recorded in the year-ago quarter and way above the Zacks Consensus Estimate of 28 cents. Sales grew 19% to $110 million on the back of healthy performance in the domestic as well as international markets. Gross margin grew by 200 basis points year over year.   

Gorman-Rupp’s stellar performance in the quarter induced positive reactions as evidenced by a hike in earnings estimates. In the last 7 days, the Zacks Consensus Estimate has increased by 9.4% to $1.52 for 2014 and by 6.3% to $1.69 for 2015 ??? representing year-over-year growth of 21.6% for 2014 and 11.2% for 2015.

In the next 5 years, Gorman-Rupp promises solid earnings growth to the tune of 10% as against 7.4% recorded in the past 5 years. In the near term, the Earnings ESP for second-quarter 2014 is 0.0% while it is +2.5% for the third quarter.

Other Stocks to Consider

Gorman-Rupp presently has a market capitalization of $794 million. Other companies worth considering in the industry include The Babcock & Wilcox Co. (BWC), Illinois Tool Works Inc. (ITW) and Broadwind Energy, Inc. (BWEN), all carrying a Zacks Rank #2 (Buy).

Read the Full Research Report on BWC
Read the Full Research Report on GRC
Read the Full Research Report on ITW
Read the Full Research Report on BWEN

Zacks Investment Research