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On Mar 22, Zacks Investment Research upgraded Carriage Services Inc. (CSV - Snapshot Report) to a Zacks Rank #1 (Strong Buy). Shares of this personal services company have recorded an impressive return of 184.4% over the last one year.

Why the Upgrade?

Carriage Services has been witnessing rising earnings estimates owing to better-than-expected fourth-quarter 2012 results on the back of quick and transformative changes throughout 2012, including major management reorganization and Funeral Standards Operating Model updates.  

Carriage Services, which primarily competes with Stonemor Partners LP (STON - Snapshot Report), outperformed the Zacks Consensus Estimates in 3 out of the trailing 4 quarters, with an average surprise of 12.2%. The long-term expected earnings growth rate for the stock is 20%.

On Feb 25, Carriage Services posted fourth-quarter adjusted earnings of 24 cents per share, beating the Zacks Consensus Estimate of 23 cents. The company’s total revenue of $53.3 million for the quarter was up 13.1% year over year and almost in line with the Zacks Consensus Estimate of $53 million. Adjusted consolidated EBITDA margin expanded 240 basis points to 25.5%.

Driven by the effective management changes in the past year as well as the company’s improved focus to boost performance, the company substantially raised its Rolling Four Quarter Outlook of Adjusted EPS to $1.11 to $1.14 from the previous guidance of $1.03 to $1.05.

The Zacks Consensus Estimate for fiscal 2013 increased 9.7% to $1.13 per share as most of the estimates were revised higher over the last 30 days. Moreover, for fiscal 2014, the estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 6.7% to $1.27 per share.

Other Stocks to Consider

Besides Carriage Services, other stocks in the personal services industry that are currently performing well include Service Corp. International (SCI - Snapshot Report) and Stewart Enterprises Inc. , both of which hold a Zacks Rank #2 (Buy).

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