Schweitzer-Maudit International, Inc.
by Michael VodickaSeptember 27, 2011 | Comments : 0 Recommended this article: (0)
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Schweitzer Maudit International, Inc. manufactures and sells paper and reconstituted tobacco products to the tobacco industry and other specialized applications. The company was founded in 1995 and has a market cap of $938 million.
With investors getting nervous about slower economic growth or a possible contraction, defensive stocks and conservative segments of the market have fallen in favor. That and strong Q2 results from early August lifted SWM to a fresh multi-year high.
Revenue for the period was up 13% from last year to $206 million. Earnings also came in strong at $1.21, 19% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 6% over the last four quarters.
The company was also busy returning value to its shareholders, buying back $75 million in common stock during the quarter.
We saw some pretty solid movement in estimates off the good quarter, with the current year adding 30 cents to $5.45 while the next-year estimate gained 42 cents to $6.89, a bullish 26% growth projection.
But in spite of its resilience, SWM has serious value trading with a PEG ratio of .42, well below the traditional benchmark of 1 for value.
On the chart, SWM has held up well in the weak market, recently jumping into a new six-month high. Look for support from the 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 Zacks Momentum Trader Service.
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