Standard Motor Products, Inc.
(SMP - Analyst Report
) has been on fire in the second half of 2011, more than doubling in price after hitting a fresh all-time high on strong Q3 results. That has estimates on the move too, providing more support and momentum for this Zacks #1 Rank stock.
Standard Motor Products, Inc. manufactures and distributes replacement parts for motor vehicles in the automotive aftermarket industry. The company was founded in 1919 and has a market cap of $451 million.
Although SMP has been trading strong for the last six months, shares got an extra boost in early November after the company reported strong Q3 results that came in ahead of expectations.
Revenue for the period was up a marginal 1% from last year to $236 million. But earnings looked great, coming in at 59 cents, 23% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 93% over the last four quarters.
The good quarter was driven by sales gains in its Engine Management segment, up 7.6% from last year. Gross margin was also on the upswing, climbing more than 100 basis points from last year to 27.3%.
The company has used its earnings momentum to strengthen its financial profile, with cash and short-term investments holding steady at $15 million while total debt fell almost 50% to $42 million.
We saw some pretty solid movement in estimates off the good quarter, with the current year adding 12 cents to $1.55 while the next-year estimate gained 18 cents to $1.72, a bullish 11% growth projection.
With a PEG ratio of 1, SMP trades in line with the benchmark of 1 for value.
On the chart, shares have been jumping higher for the last six months, recently hitting a new all-time high on the strong Q3 results. Take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.