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Belden Inc. (BDC - Snapshot Report) has delivered 7 straight positive earnings surprises with an average beat of almost 13.0%. Strong estimate revisions after impressive second quarter results helped this cable, connectivity and networking solutions provider achieve a Zacks #1 Rank (Strong Buy) on August 16. Furthermore, a forward price-to-earnings (P/E) multiple of just 12.0 and price-to-sales (P/S) multiple as low as 0.85 make it a true value pick.

Margin Expansion Drove 2Q Results

Belden reported strong second quarter 2012 results on August 9 with earnings of 92 cents per share, which exceeded the Zacks Consensus Estimate by 18 cents or 24.3%. The better-than-expected earnings were primarily driven by strong margin expansion.

Revenue declined 9.7% from the prior-year quarter to $484.0 million. However, this decline was more than offset by a 90 basis points improvement in operating margin due to stringent cost control. Total operating expenses declined 6.0% year over year to $93.0 million.

Guidance Raised

The strong second quarter earnings encouraged Belden to raise its full year 2012 earnings estimate to between $2.95 and $3.05 per share on revenue of $1.95 billion to $1.97 billion.

Belden recently announced the acquisition of Miranda Technologies Inc. for $374.7 million in cash. The full year guidance includes $80 million of revenues and 14 cents per share related to the Miranda acquisition.

Earnings Estimates Moving Up

For 2012, the Zacks Consensus Estimate jumped 8.0% to $2.98 over the past 30 days as seven of eight estimates were revised upward. For 2013, the Zacks Consensus Estimate of $3.54 improved 6.9% on the back of upward revisions from, again, seven of eight estimates.

Valuation Continues to Impress

In addition to low P/E and P/S multiples, the stock looks attractive with respect to its price-to-book (P/B) multiple of just 2.34. A P/E below 15.0, a P/S ratio less than 1.0 and a P/B ratio under 3.0 generally suggests a value stock. Moreover, Belden’s PEG ratio of just 0.91 indicates that the stock is reasonably valued given the expected growth of 13.3%.

St. Louis, Missouri based Belden Inc. was incorporated in 1988. Belden Inc. designs, manufactures and sells products that help in the transmission of signals for data, sound and video applications. Its products primarily cater to the industrial, enterprise, broadcast and consumer electronics end markets. The company has a market cap of $1.63 billion.

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