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Standex International Corp (SXI - Free Report) looks like it should continue to outpace the S&P thanks to upward estimate revisions coupled with cheap valuations.

Additionally, this Zacks #1 Rank (Strong Buy) is still expanding its global footprint through acquisition.

Company Description

Standex makes global manufacturing company operating in 5 different segments from food services to hydraulics. After a recent acquisition, the company has a presence on every continent except Antarctica.

A Good Surprise

The last quarterly report was back in late October and was the third quarter of consecutive quarter of year-over-year revenue growth. Revenue was up more than 3%, to $157.1 million.

Additionally, margins continue to widen, leading to a 9% increase in net income to $10.2 million. Earnings per share were 80 cents, up a nickel and 11 cents better than expected.

Expansion Continues

Around that same time Standex announced that acquisition of Tri-Star, which will build up the Food Service Equipment group. The CEO went onto say that the company plans to make more similar moves moving forward.

On Jan 4 Standex did just that when it announced the purchase of S.A. Chemical Etching, a South African company that will bolster Standex's engraving business.

Analysts Keep Raising Estimates

Over the past 3 months the full-year consensus for fiscal 2011 is up a dime, to $2.50. Next year's forecasts are averaging $2.80, a 15 cent increase.

Given the $2.25 earned in fiscal 2010, annual growth rates are at 11% and 12%, respectively. And that growth is coming at a fair price, the PEG is 1.0. The price to sales ratio is just under 0.7 times which is well ahead of its peer group average.

The Chart

Despite a recent hiccup, shares of SXI have been easily beating the S&P 500, which is the blue line. Thanks to the upward earnings momentum and cheap valuations, that trend should continue.

Standex International Corp - ticker SXI >


Bill Wilton is the Aggressive Growth Stock Strategist for He is also the Editor in charge of the market-beating Zacks Small Cap Trader service

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