Rock-Tenn Company

Highlighted stocks include Rock-Tenn Company (RKT - Snapshot Report), United Online Inc. (UNTD - Snapshot Report), Parlux Fragrances Inc. (PARL - Snapshot Report), Zhongpin Inc. (HOGS), and Monro Muffler Brake Inc. (MNRO - Snapshot Report).

Rock-Tenn Company (RKT - Snapshot Report), the packaging products manufacturer, reported record fourth-quarter earnings on Nov 3 as strong demand continued for consumer packaging and paperboard products.

Sales jumped 30% to $785.7 million from $604.8 million in the fourth-quarter of 2007. The increase was due to growth in sales in each of the company's segments and the Southern Container acquisition. Sales growth in the consumer and corrugated packaging segments was boosted by price increases.

The company missed on estimates by a penny, reporting adjusted earnings per share of 87 cents compared to analysts estimates of 88 cents. Income rose 66% over the fourth-quarter of 2007 to $90.3 million.

Consensus Estimates Rise

Given the record quarter in a difficult economic environment, analysts are bullish on 2009. 2009 full-year consensus estimates jumped 9% to $3.62 from $3.33 in the last 30 days. Analysts expect 2009 year-over-year earnings growth of 41.28%.

Value Fundamentals

Rock-Tenn Company is a Zacks #1 Rank (Strong Buy) stock. RKT is much cheaper than when we last reviewed it on Mar 26. It was trading at 11.3x forward earnings in March and is now trading at only 7.2x forward earnings. The company has a solid 1-year return on equity (ROE) of 16.38%.

Read the Mar 26 analysis.

Update to Previous Value Zacks Rank Buy Stocks

United Online Inc. (UNTD - Snapshot Report), the internet retail and social networking company, saw its social networking site post record revenues for the third-quarter as pay accounts rose. UNTD trades at only 5.4x forward earnings. Read the Nov 18 analysis.

Parlux Fragrances, Inc. (PARL - Snapshot Report), the manufacturer of designer fragrances, which has no debt, offers an attractive forward P/E ratio of 7. The company’s price-to-book is at 0.62, well below the industry average of 1.3. Read the Nov 19 analysis.

Zhongpin Inc. (HOGS), the Chinese-based meat processor, saw revenues soar 116% to a new record in the third quarter. HOGS has surprised on estimates 3 out of the last 4 quarters on average of 7.25%. The company is cheap. HOGS is trading at only 5.7x forward earnings. Read the Nov 20 analysis.

Monro Muffler Brake Inc. (MNRO - Snapshot Report), which specializes in undercar repairs and services through retail outlets in 18 states, raised full-year 2009 guidance after posting record sales in the second-quarter. Monro has a forward P/E of 13.2. Read the Nov 21 analysis.