Quality Distribution, Inc

Estimates are on the rise, growth looks strong and valuations are cheap. So, its no wonder this stock is defying the market sell off.

Company Description

Quality Distribution, Inc. operates chemical bulk tank trucks in North America.

Fantastic Quarter

On Aug 1 earnings more than doubled to $5.6 million, from $2.2 million for the second quarter. That works out to $0.23 per share, 6 cents higher than expected. Quality Distribution now has 3 consecutive earnings surprises.

Revenues rose 7% to $190 million and are up almost 9% through the first half of the year, to $368 million. Quality Distribution said its "multifaceted growth strategy" is finally paying off and they are optimistic about its future success as well. They have worked their way into the frac shale market, which could add up to $40 million in revenue next year alone.

Forecasts Rising

Analysts unanimously raised their outlook for this year and 2012. The Zacks Consensus Estimate for 2011 is up 6 cents in the past 2 months, which accounts for the surprise and nothing more. But, that puts the annual growth rate at an impressive 115%.

The average projection for 2012 jumped 8 cents over the at time period, to $0.94. That would be a 36% growth rate.

Valuations

Growth rates like that can get pricey, but shares of QLTY are trading at just 18 times forward estimates. That puts the PEG ratio at 0.5, a great bargain. Price to sales is registering at 0.4, also showing a good value.

Defying the Market

In one of the sharpest sell offs in years, QLTY has investors smiling. Nobody strives to break even, but when the market is down this much, this chart is a sight for sore eyes. Also, the gains have come in the worst part of the selling.

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