Ladish Company

Ladish Company (LDSH) grew sales 15% in the third quarter as demand remained strong from the aerospace sector. The company has surprised on estimates 2 out of the last 4 quarters by an average of 3.84%. Ladish is cheap. Its forward P/E is only 6.3.

Company Description

Ladish manufactures advanced metal components for the aerospace and industrial markets. The company, founded in 1905, produces forgings, investment castings, machining services and tool-making products for global customers including Boeing, Caterpillar, Goodrich, Honeywell and Volvo.

Ladish, a Zacks #1 Rank (strong buy) stock, on Sep 5, completed the acquisition of privately-held California-based Chen-Tech Industries, Inc., a forger of jet engine components. The merger, valued at $59 million, was paid for with a combination of cash and Ladish common stock.

The combination is expected to boost Ladish's forging business by increasing its worldwide market share of rotating engine components.

Third Quarter Sales Jump 15%

On Oct 27, Ladish reported third-quarter earnings that topped Wall Street estimates by 37.25%. Net income rose 60% to $10.4 million, or 70 cents, from $6.5 million, or 45 cents, in the third-quarter of 2007.

Sales grew 15% to $121 million from $105 million in the year ago period. 9-month 2008 sales increased 13% year over year. Product demand remains strong. Backlog is at $673 million.

"The organic growth programs we have undertaken are nearing completion and will contribute in the forthcoming year," said Kerry L. Woody, President and CEO.

"The new isothermal press has been assembled and cycled in the third quarter with tryout production planned in December. Pacific Cast's new furnace and expansion are well under way with release for production by year-end. Our recent acquisitions of Aerex and Chen-Tech are already providing positive contributions to both earnings and cash flow," he said.

2008 Estimates Rise

Even before the solid third-quarter results were announced, covering analysts were bullish about fiscal 2008. Full-year consensus estimates for fiscal 2008 are up 11 cents to $2.06 in the last 30 days.

Value Fundamentals

Ladish is an attractive value stock. It's trading at 6.3x forward earnings. Its price-to-book is 0.91, well under the industry average of 1.51. Ladish has a solid 5-year average return on equity (ROE) of 11.02%.

Read the full analyst report on LDSH