is a Zacks #1 Rank (Strong Buy) due to its solid history of positive earnings surprises.
Ituran provides location-based services and wireless
communications products in Israel, Brazil, Argentina, and the
United States. It offers stolen vehicle recovery services,
including locating, tracking, and recovering stolen vehicles and
fleet management services which enable corporate customers to
track and manage vehicles in real time.
Six Straight Earnings Surprises
ITRN has produced a solid history of six straight positive
earnings surprises. While none of the beats are more than $0.04,
the smallest beat was the most recent of $0.01 or 3.5%. The other
smallest percentage beat is the 6.9% beat for the June 2011
quarter when the company reported earnings $0.02 ahead of the
Zacks Consensus Estimate.
Two earnings beats were double digit beats, in terms of percentage
ahead of the Zacks Consensus Estimate. The March 2011 earnings of
$0.31 was $0.03 ahead of the estimate or a beat of roughly 11%.
The September 2011 quarter saw earnings of $0.32, $0.04 or 14%
above the Zacks Consensus Estimate.
ITRN Recent Earnings
On February 22, 2012 the company reported earnings of $0.29
per share and sales of $37 million. In the year ago period, the
company reported $0.28 per share and $41 million in revenue.
ITRN trades at a discount when compared to industry average PE's,
but a premium to other metrics. The premium for forward earnings
of 10.5x is a small discount to the 10.9x industry average. The
twelve month trailing PE of 11x for ITRN hold a bigger discount
to the industry average of 20x. In terms of price to book, the 3x
multiple is a premium to the 2.3x industry average. The price to
sales metric also carries a premium to the industry average.
The price and consensus chart tells us that investors are closely
following the earnings estimate expectations for ITRN. The stock
does appear to have been trading above expectations in late 2010,
but has since returned to more palatable levels. When the stock
is well below where the future earnings estimates lines are, we
view that as a sign of being undervalued. ITRN
is a Zacks #1 Rank (Strong Buy).
Brian Bolan is the Aggressive Growth Stock Strategist
Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor