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NN Inc. Hits a New 52-Week High

Zacks Equity Research

Shares of NN Inc. (NNBR) touched a new 52-week high of $20.48 during its trading session on Dec 2. This denotes an increase over the previous high of $20.09 reached on Nov 29.  

NN Inc. closed the trading day on Dec 2 at $19.59, reflecting a solid year-to-date return of 109.7%. The trading volume for the session was 0.20 million shares. Further upside potential exists for this Zacks Rank #1 (Strong Buy) machine tool and accessories maker, as can be deduced from its earnings estimate revisions for 2013 and 2014.

Growth Drivers

NN Inc. reported impressive third quarter 2013 results on Nov 6, 2013 that sent its share price spiraling up 14.0%. Earnings per share in the quarter were 29 cents, up 31.8% above the year-ago earnings of 22 cents. The results were 3.6% above the Zacks Consensus Estimate of 28 cents.

Revenues grew 7.4% year over year on the back of improved demand in the automotive markets of North America and Asia, as well as the heavy truck markets of Europe. However, the growth in the quarter was restricted by weak demand from the European automotive and industrial market.

Operating income in the quarter grew 31.7% year over year while margin stood at 8.4%, up 160 basis points year over year. Moreover, NN Inc. follows a consistent policy of rewarding its shareholders through dividend payments, having returned roughly $2.1 million through dividend payments. The quarterly rate stands at 6 cents, to be paid on Dec 20 to shareholders of record as on Nov 28.

For the quarters ahead, management of NN Inc. intends to drive growth through organic and inorganic investments.

Estimate Revisions Show Potency

Over the last 30 days, the Zacks Consensus Estimate for NN Inc. has increased by 3.0% to $1.04 for 2013 and 5.9% for 2014. The estimate for year 2014 represents year-over-year growth of 21.2%.

NN Inc. currently has a market capitalization of $341.9 million. Other players in the machine tools and accessories industry which look attractive at current levels include CIRCOR International, Inc. (CIR), Dynamic Materials Corp. (BOOM) and NSK Ltd. (NPSKY). All these stocks carry the same Zacks Rank #1 (Strong Buy) as NN Inc.

Read the Full Research Report on BOOM
Read the Full Research Report on CIR
Read the Full Research Report on NNBR
Read the Full Research Report on NPSKY

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