Park-Ohio Holdings Corp
is a Zacks #1 Rank (Strong Buy) after posting nine straight upside
surprises in as many quarters and getting higher estimates
Park-Ohio Holdings Corp. engages in the industrial supply chain
logistics and diversified manufacturing business in the United
States, Asia, Canada, Mexico, and Europe. The company operates in
three segments: Supply Technologies, Aluminum Products and
Manufactured Products. The company was founded in 1961 and is
based in Cleveland, Ohio.
PKOH Tops Expectations For Nine Straight Quarters
PKOH has beaten the Zacks Consensus Estimate in each of the last
nine quarters. Over the course of the last six beats, Wall Street
got wowed by results that topped expectations by as much as 105%.
These huge beats were enough to move the stock substantially, as
the 105% beat moved the stock 21% and a 97% beat two quarters
prior moved the stock 23%. In between those two huge beats there
was the June 2011 quarter which beat expectations by $0.22 or 46%.
This time, however, the stock fell 5% following the report.
PKOH Recently Reported Earnings
On March 5, 2012 the company reported revenue of $234 million
roughly $21 million less than the Zacks Consensus Estimate and
higher than the $220 million reported in the year ago period. EPS
of $0.64 was $0.14 ahead of the estimate or a 28% beat.
Earnings Estimates Bumped Up
Following the most recent earnings report, analysts bumped up
their earnings estimates for 2012. The Zacks Consensus Estimate
for 2012 EPS moved from $2.85 in February 2012 to the current
level of $3.00.
PKOH trades at a significant discount to the industry average on
several key metrics that aggressive growth investors look to. A
trailing twelve month PE of 7x is well below the 19x industry
average but a 6.6x forward PE is right in line with a 6.8x
industry average. At a less than half the industry average of
6.45x, PKOH's price to book is a significant discount at 3.6x.
Finally, the metric that is most telling is price to sales. At
0.25x PKOH is well below the 6x industry average and could trade
at this level due to the low number of covering analysts.
When we look at the chart, we see a stock that participated in the
recent market rally, but seemingly only the first part of it.
While the stock is comfortably above the 200 day moving average it
has been stuck in a tight range. More analyst coverage could bring
more institutions to this stock which carries some very attractive
valuation metrics. PKOH 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