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EnPro Upgraded to Strong Buy

by Zacks Equity Research

March 12, 2013 | Comments : 0 Recommended this article: (0)

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Zacks Investment Research upgraded EnPro Industries, Inc. ( NPO - Snapshot Report ) to a Zacks Rank #1 (Strong Buy) on March 1, 2013.

Why the Upgrade?

EnPro Industries reported a solid fourth quarter and year 2012 financial results on February 7, 2013. The company's earnings per share, before special items, came in at 59 cents, way above 37 cents in the year-ago quarter and 110.7% above the Zacks Consensus Estimate of 28 cents.

Revenue for the quarter improved 3% on the back of healthy performances from Sealing Products and Engine Products and Services segments, recording 2% and 42% revenue increases, respectively. This was, however, partially offset by a 13% decline in revenue generated from the Engineered Products segment.

EnPro Industries' operating income increased 57% while margin stood at 7.2%, generating an increase of 250 basis points year over year. Net cash generated from operating activities grew 45.2% while cash and cash equivalents at the end of the quarter stood at $53.9 million, up 75.6% year over year.

Four straight quarters of positive earnings surprise with the average of 69.6%, raises optimism for a better quarter ahead for EnPro Industries. For 2013 and 2014, we have an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +6.8% and +3.4%, respectively.

In the last 60 days, the Zacks Consensus Estimate for 2013 increased by 7.7% to $2.65 while that for 2014 the estimate went up 8.4% to $2.98.

Other Stocks to Consider

Other stocks worth a look in the industry are Atlas Copco AB ( AIMC - Snapshot Report ) , with a Zacks Rank #1 (Strong Buy) and The Babcock & Wilcox Company ( BWC - Snapshot Report ) and Blount International Inc. ( BLT - Snapshot Report ) , each bearing a Zacks Rank #2 (Buy).

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