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Myers Industries Inc. (MYE - Snapshot Report) has put together strong operating performances for six consecutive quarters, and its stock price is now hovering near its 52-week high. Shares of this polymer products company have increased 33% year to date.
Furthermore, MYE became a Zacks #1 Rank (Strong Buy) on April 24, five days after reporting its first quarter results.
First Quarter EPS Soars
Myers Industries posted first-quarter 2012 earnings of 30 cents per share on April 19, which beat the Zacks Consensus Estimate of 23 cents, a 30.4% positive surprise. The result grew 50% from the year-ago quarter. A favorable product mix and operational efficiencies benefited the quarter.
Net sales inched up 1.7% to $198.8 million, mirroring a sales increase across the Distribution and Engineered Products segment, partially mitigated by lower sales at Material Handling and Lawn & Garden. Gross profit rose 7.2% to $58 million and gross margin expanded 150 basis points to 29.2%.
Estimates Flying High
The Zacks Consensus Estimates for 2012 and 2013 increased 13.6% and 5.9% to 92 cents and $1.08, respectively, in the last 60 days. The current Zacks Consensus Estimate for 2012 suggests year-over-year growth of 37.3%.
Valuation Stretched, Yet Lucrative
Myers Industries currently trades at a forward P/E of 18.4x, reflecting a 41.4% premium to the peer group average of 13.0x. Also, on a price-to-book basis, the shares trade at 2.6x, a 156.9% premium to the peer group average of 1.0x.
The stock has a 12-month return on equity (ROE) of 12.5%, which is well above its peer group average of 3.9%. This implies that the company reinvests its earnings more efficiently than its peer group.
Chart Echoing Strength
Shares of Myers Industries had been trading in the range of $12.69 to $15.79 for the period between January 3 and April 4, 2012. It broke that range on April 5 and started inching closer to its 52-week high of $17.54. Moreover, the stock is currently above its 50 and 200-day moving averages, which stand at $16.60 and $14.12, respectively. In fact, the stock has been consistently trading above its 200-day moving average since October 4, 2011. Also, it has remained above the 50-day moving average since March 5, 2012.
Volume is fairly strong, averaging roughly 168K daily. Myers Industries, which competes with Newell Rubbermaid Inc. (NWL) and Snap-on Inc. (SNA), has outperformed the S&P 500 performance over the past six months. The year-to-date return for the stock is 36.1% compared with the S&P 500s return of 6.0%.
Founded in 1933 and headquartered in Akron, Ohio, Myers Industries produces polymer products catering to industrial, agricultural and automotive sectors, as well as for commercial, and consumer markets. The company also distributes tools, equipment and supplies for the tire, wheel and undervehicle service industry. The company reports through four operating segments: Material Handling, Lawn & Garden, Distribution and Engineered Products.