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Value

Gardner Denver, Inc. (GDI) is still on track for double digit earnings growth in 2012 after posting several record quarters in 2011. This Zacks #1 Rank (strong buy) has attractive valuations with a forward P/E of 13.8.

Gardner Denver manufactures highly engineered products including reciprocating, rotary and vane compressors, liquid ring pumps and blowers for various industrial and transportation applications.

It also makes pumps used in the petroleum and industrial market segments, and other fluid transfer equipment serving chemical, petroleum, and food industries.

Acquisition of Robuschi Completed

On Dec 15, Gardner Denver completed its previously announced acquisition of Parma, Italy based Robuschi S.p.A for $200 million. Robuschi, an Italian based manufacturer of blowers and pumps, had annual revenue of $92 million.

Its pumps are used in end markets such as wastewater, mining and power generation. The company has facilities in Italy, Brazil and China. This acquisition ties into the company's expanding international strategy.

It is not expected to have a material impact on Q4 earnings.

Another Record Quarter in Q3

On Oct 20, Gardner Denver reported its third quarter results and surprised on the Zacks Consensus for an impressive 9th quarter in a row. Earnings per share were a quarterly record $1.48 compared to the Zacks Consensus of $1.37.

Revenue jumped 25% to a record $614.7 million from $493.4 million a year ago as both business segments saw gains in the quarter.

The Engineered Products Group continues to be hot, as revenue rose 38% and orders jumped 7% in the quarter on strong demand for drilling and well servicing pumps, aftermarket products and growth in emerging markets.

The Industrial Products Group saw revenue rise 14% and orders jump 21% on improvement in demand for OEM products, custom engineered packages in Asia Pacific and aftermarket parts and services.

Zacks Consensus Estimates Still Bullish for 2011 and 2012

In the last 90 days, the 2011 Zacks Consensus Estimate has jumped to $5.50 from $5.36 per share.

That is earnings growth of 62.2%.

But 2011 will likely be a record year. Can it keep up the growth in 2012?

Analysts think so. 1 estimate has risen for 2012 in the last month pushing the 2012 Zacks Consensus up to $6.14 from $6.09.

That is further earnings growth of 11.6%.

Still a Value Stock

Shares were on a tear for the last 2 years, hitting new multi-year highs until the summer stock sell-off sent them tumbling.

They have since rebounded but are still under the recent highs.

Valuations continue to be attractive. The price-to-book ratio of 3.2 is a little more elevated than the normal value cut off of under 3.0 but it is still a solid P/B ratio.

It also continues to sport a P/E under 15, which is the cut-off I use for value.

Additionally, the company has a stellar 1-year return on equity (ROE) of 20.8%.

Value investors get the best of both worlds with Gardner Denver: both value and growth. It is a way for investors to indirectly play the hot drilling market.

This Week's Value Zacks Rank Buy Stocks

The fertilizer companies are out of favor. CF Industries Holdings Inc. (CF) is trading at just 6.3x forward estimates. Yet this Zacks #1 Rank (strong buy) is expected to grow earnings by 162% in 2011. What's holding this stock back? Read the full article.

It's not too late to find value in the energy services sector. Parker Drilling Company (PKD) continues to be a value stock even as shares hit new multi-year highs. This Zacks #1 Rank (strong buy) is now trading with a forward P/E of 14.2, up from 11.9 in mid-November. Read the full article.

Coinstar, Inc. (CSTR) took advantage of the stumble in the DVD rental wars by its rival Netflix in 2011 to build momentum for it redbox brand. This Zacks #1 Rank (strong buy) is a value stock that is also expected to grow earnings by double digits in 2012. Read the full article.

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 on twitter at traceyryniec.

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