Standex International

Additionally, this Zacks #1 Rank (Strong Buy) is still expanding its global footprint through acquisition.

Company Description

Standex makes global manufacturing company operating in 5 different segments from food services to hydraulics. After a recent acquisition, the company has a presence on every continent except Antarctica.

A Good Surprise

The last quarterly report was back in late October and was the third quarter of consecutive quarter of year-over-year revenue growth. Revenue was up more than 3%, to $157.1 million.

Additionally, margins continue to widen, leading to a 9% increase in net income to $10.2 million. Earnings per share were 80 cents, up a nickel and 11 cents better than expected.

Expansion Continues

Around that same time Standex announced that acquisition of Tri-Star, which will build up the Food Service Equipment group. The CEO went onto say that the company plans to make more similar moves moving forward.

On Jan 4 Standex did just that when it announced the purchase of S.A. Chemical Etching, a South African company that will bolster Standex's engraving business.

Analysts Keep Raising Estimates

Over the past 3 months the full-year consensus for fiscal 2011 is up a dime, to $2.50. Next year's forecasts are averaging $2.80, a 15 cent increase.

Given the $2.25 earned in fiscal 2010, annual growth rates are at 11% and 12%, respectively. And that growth is coming at a fair price, the PEG is 1.0. The price to sales ratio is just under 0.7 times which is well ahead of its peer group average.

The Chart

Despite a recent hiccup, shares of SXI have been easily beating the S&P 500, which is the blue line. Thanks to the upward earnings momentum and cheap valuations, that trend should continue.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service