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The manufacturing sector has recovered from the global recession. Carlisle Companies (CSL - Snapshot Report) is expected to generate double digit earnings growth in 2011. This Zacks #1 Rank (strong buy) has attractive valuations, including a forward P/E of 14.7.

Carlisle is a global manufacturer in numerous industries including construction materials, commercial roofing, heavy-duty brake and friction, foodservice, specialty tire and wheel, power transmission and aerospace.

Expansion Strategy Paying Off

On Dec 2, the company closed on its all-cash acquisition of Hawk Corporation, a supplier of friction products for brakes, clutches and transmissions for $413 million.

The company joined Carlisle's Industrial Brake & Friction segment and already contributed in its first quarter, contributing 14% in sales from the first quarter of 2010.

Sales Jumped

On Apr 26, Carlisle reported total first quarter sales rose 27% to $693.6 million from $547.3 million in the first quarter of 2010. Hawk contributed $76.2 million.

Organic sales rose 13% compared to last year as all segments saw sales growth except Carlisle FoodService Products.

In the Brake & Friction segment, sales soared to $110.8 million from $22.5 million on the back of the $76.2 million contribution from Hawk.

But there was also strong global demand for off-highway braking applications in the construction and mining markets. Margins improved to 16.4% from 9.3%, mainly reflecting the 17.5% margin from Hawk.

The Transportation Products segment also boosted the quarter with a 10% gain in sales to $209.1 million due to higher selling prices but also demand from original equipment manufacturers.

Commodities Price Increases Could Bite

One area of caution, however, was the increase in raw material costs.

The Transportation Products segment saw natural and synthetic rubber rise 51% and 27%, respectively. The Interconnect Technologies segment also experienced a rise in raw material prices for silver and copper but still managed to see a 6% increase in sales.

The company remains concerned about how rising raw material prices could affect its earnings but, so far, rising sales volumes and prices, as well as higher margins, have been reducing the impact. Stay tuned!

Zacks Consensus Estimates Rise

The company surprised on the Zacks Consensus Estimate for the 3rd straight quarter. It reported 53 cents compared to the estimate of 45 cents.

Given the beat, and the company's overall positive tone, the analysts have been raising full year estimates for both 2011 and 2012.

The 2011 Zacks Consensus Estimate jumped to $3.04 from $2.98 in the last month. This is earnings growth of 34.5%.

Growth looks equally bullish in 2012, with earnings expected to jump another 19% to $3.62 per share.

Still Has Attractive Valuations

Shares have really rallied since last fall, but the stock still has attractive valuations.

In addition to a P/E under 15, which is what I normally use as a cut-off for "value" stocks, Carlisle has a price-to-book of just 2.0 which is under the 3.0 level for value.

It also has other solid fundamentals, including a return on equity (ROE) of 11.4% and it pays a dividend to shareholders which is currently yielding 1.5%.

Carlisle is benefiting from the manufacturing growth in the emerging markets but yet its valuation remains within the "value" territory.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her at twitter.com/traceyryniec.

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