Brush Engineered Materials, Inc.
by Michael VodickaDecember 15, 2010 | Comments : 0 Recommended this article: (0)
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Brush Engineered Materials, Inc. manufactures and sells engineered materials for a wide range of industries like technology, aerospace and medical. The company was founded in 1931 and has a market cap of $820 million.
Although BW has been jumping higher since early July, shares got an extra boost on Oct 28 after the company reported strong Q3 results that easily beat expectations.
Revenue for the period was the second highest in the company's history, up 71% from last year to $325 million. Earnings also came in strong at 65 cents, 30% ahead of the Zacks Consensus Estimate, where the company now has an average earnings surprise of 44% over the last three quarters.
Although the company's sales were helped by two acquisitions and higher metal prices, adding $55 million and $29 million respectively, organic growth was also strong, up 27% from last year to $51 million.
The company's largest segment, Advanced Material Technologies, saw sales increase 68% from last year to $215 million, helped by the previously mentioned acquisitions.
Brush Engineered's biggest gains came from its Engineered Material System's division, with sales up 86% from last year to $17 million. Its Specialty Engineered Alloys division was close behind, up 76% from last year to $76 million.
Little Debt on Balance Sheet
Although the company doesn't have a huge cash position, with cash and equivalents totaling $15 million, it also has little debt, at just $98 million.
We saw some pretty decent movement in estimates off the good quarter, with the current year gaining 21 cents to $2.22 and the next-year estimate adding 16 cents to $2.32.
But in spite of the recent gains, BW still has a compelling valuation, with a forward P/E of 18X against the industry average of 29X.
On the chart, BW has been strong since July, recently jumping to a new multi-year high at $39.99 on the good quarter. The stochastic below the chart is signaling that shares are trading safely away from over-bought territory. Look for support from the long-term trend line on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
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