Back to top

Analyst Blog

On Jun 27, 2013,Precision Castparts Corp. (PCP - Analyst Report) hit a new 52-week high of $226.94, beating its previous high of $221.90 attained on Jun 18. Precision shares are currently trading at $225.64 as of closing, reflecting a year-to-date return of 16%.

Shares of this leading manufacturer of complex metal components and products have been steadily riding high during the last one year. Recently, the company reported its fourth quarter 2013 results with EPS of $2.82, surpassing the Zacks Consensus Estimate of $2.77 by 1.8%. Quarterly earnings were up 22.1% year over year from $2.31 in the fourth quarter of 2012.

Growth Drivers

Precision has a proven track record of increasing market share through acquisitions and developing new growth opportunities. The company is expected to benefit from the strong free cash flow and enormous funds available that will boost its organic growth.

Precision experienced significant growth in its Aerospace and Forged products divisions in 2013. Currently, the aerospace market looks promising and is expected to grow in the near future. Also, demand in industrial gas turbine (IGT) looks encouraging. The company’s new product, Boeing 787 for The Boeing Company (BA - Analyst Report)), is also beginning to gain traction.

The company is continually focusing on expanding its product lines and markets. Moreover, Precision completed eight acquisitions in fiscal 2012, which contributed approximately $400 million to sales. With improved sales and a strong market position based on global diversity, Precision is poised to grow organically.

Other Stocks to Consider

Given management’s stellar acquisition track record, new product line and robust free cash flow generation, we have a high conviction that any large deal or collection of smaller deals will continue to be accretive. Hence investors can look forward to improved results in coming quarter and continue holding the stock.

Presently, Precision has a Zacks Rank #3 (Hold). Some other companies of the same sector worth considering at the moment are NSKLtd. (NPSKY) which has a Zacks Rank #1 (Strong Buy), and Norsk Hydro ASA (NHYDY) has a Zacks Rank #2 (Buy) each.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SOUTHWEST A… LUV 31.96 +2.30%
CHINA BIOLO… CBPO 47.40 +2.20%
MALLINCKROD… MNK 72.35 +2.02%
PLANAR SYST… PLNR 4.30 +1.78%
GILEAD SCIE… GILD 103.97 +1.66%