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Universal Stainless & Alloy Products, Inc. (USAP - Free Report) looked like it was headed for trouble after being featured as a Zacks Rank Buy in May. That was until the company came out with 2 great announcements.

Estimates have been moving higher and the stock is now a Zacks #2 Rank (Buy), poised to hit new highs.

Company Description

Universal makes semi-finished and finished steels. The company's products are used in heavy equipment manufacturing, petrochemical, and other industries.

Raising Guidance

Back on Jun 15 shares of USAP looked like they were in a tailspin. But, the company came out with upgraded guidance that changed the market's tune in a heartbeat.

Universal said it expected quarterly EPS to land between $0.75 and $0.85, at the time the Zacks Consensus Estimates was $0.73. So, needless to say, analysts quickly raised their estimates.

Full-year estimates have been volatile, but right now they average $2.53, which is a 31% growth rate. Next year's estimates surged to $3.94, for a 56% growth rate.

Upcoming Surprise?

Rising estimates, especially from the company, can get investors pretty excited ahead of an earnings report. We should see if Universal will deliver next week.

The company has an great history of beating estimates, beating in each of the past 6 quarters. Other than missing once and meeting twice, they have topped forecasts in each quarter for the past 5 years.

New Acquisition

Mid June was a busy time for Universal. Just ahead of the revised guidance the company announced the acquisition of Patriot Special Metals. The deal will broaden Universal's production capabilities into higher margin areas.

Financing for the $105 million deal includes cash, bank loans and a $20 million convertible note issued to the seller.

Sharp Turnaround

I mentioned that shares were in a downward spiral earlier, but look how sharply the 2 news stories changed the direction of USAP. The stock's surge brought it to a 4-year high and is within a few percent of the all-time highs.

Read the May 9th Feature Here

Universal Stainless & Alloy Products, Inc. - ticker USAP >

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

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