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Analyst Blog

Shares of SPX Corporation (SPW - Snapshot Report) hit a 52-week high of $100.24 during Tuesday’s trading session. However, the stock closed the session at $99.27, which reflects a solid yearly return of 41.4%. The average trading volume for last three months aggregated 181,730 shares.

Despite strong price appreciation, this Zacks Rank #3 (Hold) stock still has some solid fundamentals that may further drive the stock upward. A forward P/E of 25.5x and long-term EPS growth expectations of 16.7% are some catalysts driving the stock.

Growth Drivers

Modest third-quarter 2013 results that comprised higher margins across its businesses, improved bottom-line and operational excellence were the primary driving factors for SPX Corporation.

On Oct 30, SPX Corporation reported third quarter net income of $62.1 million or $1.40 per share that improved from $60.2 million or $1.16 per share in the year-ago quarter.

The company has been making efforts to increase its internal revenue growth through a diligent execution of operational plans. Coupled with that, SPX Corporation is focused on strengthening its core business and divesting its non-performing assets.

The company reported higher revenues in two of its three segments. The growth was primarily driven by the increased demand for oil and gas valves and pumps, power transformers and fare collection systems.

In addition, the company maintains a sound and flexible balance sheet with ample liquidity that enables it to capitalize on potential acquisition opportunities to fuel its top-line growth. We remain encouraged by the organic growth of the company and expect it to continue its bull run in the coming quarters.

Estimate Revisions

Over the last 7 days, the earnings estimates did not show any upward or downward revision for 2013. Although there is a lacuna of estimate revisions, we envision an uptrend for the stock backed by its strong growth potential.

Other Stocks to Consider

Other stocks that look promising and are worth a look now include Motorcar Parts of America Inc. (MPAA - Snapshot Report), having a Zacks Rank #1 (Strong Buy), and Genuine Parts Company (GPC - Analyst Report) and  LKQ Corp. (LKQ - Snapshot Report), both carrying a Zacks Rank #2 (Buy).