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Standard Motor Products (SMP)

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Standard Motor Products (SMP) enjoys strong brand recognition worldwide. Successful R&D and perfect strategic acquisitions have helped the company enrich its product portfolio and maintain a broad customer base. Standard Motor's recently amended credit agreement with GE capital has increased its scope for further investments.

Moreover, Standard Motor has hiked its dividend payment, signaling the company's improved confidence in its operations. Furthermore, the company is not vulnerable to the cyclicality of the auto industry. In the first quarter, its earnings exceeded the Zacks Consensus Estimate by $0.18 per share.

Therefore, we have maintained our Outperform recommendation on the stock. Our $17.00 target price, which is 12.1x our 2011 EPS estimate, reflects this view.

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