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Analysts have been slow to react to the recent news, so it is not too late to get into this Zacks #2 Rank (Buy).
Stoneridge makes engineered electrical components for the automotive, agriculture and off-highway vehicle industries. The company is headquartered in Ohio and has a market cap of roughly $250 million.
On Feb 4 Stoneridge reported fourth-quarter and year-end results. For the quarter, net sales jumped 20% to $161 million. The company said a combination of higher demand and organic growth both led to the increase.
As for the bottom line, net income came in at $4.4 million, up nicely from a $0.2 million loss a year ago. Strip out a $1.3 million one-time charge and EPS comes out to 23 cents, which is well ahead of the 14 cents analysts were expecting.
Management said that it expects the current sales trend to continue, projecting annual sales growth of 13-18% in 2011. Only 1 of the 3 covering analysts has submitted an updated estimate, but the revision was enough to move the consensus higher.
The Zacks Consensus Estimates for 2011 jumped a nickel, to $1.31. Next year it is up 6 cents to $1.84. For now the projected growth rates are 176% and 40%, respectively, but that should change once the other 2 analysts update their projections.
Priced to Move
Shares of SRI are trading with a price to sales of just 0.61 times, which is well ahead the mean for its peer group. The P/E is just 11.5 times this year's estimates and 8.2 times the 2012 forecast.
Some of that value has to do with the lack of movement on the earnings report. Shares tried to surge higher but there was enough selling on the news to keep shares at a modest gain. However, this creates a great entry point and the MACD is showing that momentum is starting to shift to the upside.
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
This Week's Aggressive Growth Zacks Rank Buy Stocks
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Estimates and sales are climbing, creating a fantastic value as well as growth story for this Zacks #1 Rank (Strong Buy).
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This Zacks #1 Rank (Strong Buy) has double-digit growth, increasing estimates and attractive valuations.
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The company is set to report in early March, but now looks like a great time to get into this Zacks #1 Rank (Strong Buy).
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