UFP Technologies Hits New 52-Week High: What's Driving It?

Shares of UFP Technologies, Inc. UFPT reached a new 52-week high of $28.55 during its trading session on Jul 5. This apex improved upon the last 52-week high of $28.50 on Jul 3.

In the last one year, shares of the company have rallied 23.12%, outperforming the gain of 18.34% recorded by the Zacks categorized Containers Paper/Plastic industry.

On Jul 5, UFP Technologies closed its trading session at $27.90 per share, yielding a year-to-date return of roughly 9.6%. Positive earnings estimate revisions for 2017 and 2018 indicate the stock’s potential for further price appreciation.

Growth Drivers

Market sentiments have been favoring UFP Technologies for quite some time now, especially after the company reported solid first-quarter 2017 results, with an earnings beat of 30.43%. Improvement in profitability was achieved primarily on the back of higher sales generation in medical end markets, rise in orders in military/aerospace market and efforts to improve operating efficiency. Since the results release on May 3, the company’s share price has rallied roughly 5.3%. Also, after beating estimates in two of the last four quarters while lagging in two, the company managed to pull off an average positive earnings surprise of 7.91%.
    
For the quarters ahead, UFP Technologies expects to continue reaping benefits from its strategic initiatives. These efforts have been aimed at improving manufacturing processes, adding new equipments, maximum utilization of cell layouts and optimizing talented workforce. Also, the company anticipates generating revenues of $2.3 million in 2017 from its Southeast automotive door panel program. This program, started in 2004 with Mercedes Benz, is predicted to be completed in the fourth quarter of 2017.

Also, UFP Technologies remains committed toward returning value to shareholders through its share buyback programs. Of its $10 million share buyback program authorized in Jun 2015, the company bought back shares worth $0.59 million as of Mar 31, 2017. The remaining authorization of $9.4 million, as and when implemented, will work in the company’s favor.    

We believe that UFP Technologies’ solid prospects have led to the positive revisions in earnings estimates. Over the last 60 days, the stock’s Zacks Consensus Estimate grew 18.8% to $1.39 for 2017 and 1.7% to $1.75 for 2018. These estimates represent year-over-year growth of 26.36% for 2017 and 25.90% for 2018.

UFP Technologies, Inc. Price and Consensus

 

UFP Technologies, Inc. Price and Consensus | UFP Technologies, Inc. Quote

Zacks Rank & Stocks to Consider

With a market capitalization of $202 million, UFP Technologies currently carries a Zacks Rank #2 (Buy). Other stocks with the same rank in the sector include Donaldson Company, Inc. DCI, Parker-Hannifin Corporation PH and AptarGroup, Inc. ATR. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Donaldson Company pulled off an average positive earnings surprise of 3.94% in the last four quarters. Also, the stock’s earnings estimates for 2017 and 2018 have been revised upward over the past 60 days.

Parker-Hannifin’s average earnings surprise for the last four quarters was a positive 14.94%. Also, earnings expectations for fiscal 2018 improved over the past 60 days.

AptarGroup delivered an average positive earnings surprise of 1.78% for the last four quarters. Also, its earnings are predicted to grow 9.3% in the next three to five years.

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