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Crane Company

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Crane Company (CR - Free Report) is still on track for a third year of double digit earnings growth after reporting a record year in 2011. This Zacks #2 Rank (Buy) also has attractive valuations with a forward P/E of just 12.2.

You might not know the Crane name, but the company has a long track record of making useful products such as vending machines.

Founded in 1855, the company manufactures products in 5 business segments including Aerospace & Electronics which makes landing systems and electronics such as those on Mars Rovers and fighter jets; Engineered Materials such as composites; Merchandising Systems like vending machines; Fluid Control Systems; and Controls.

Fourth Quarter Sales Rise 10%

On Jan 23, Crane reported its fourth quarter and full year results. Fourth quarter sales rose 10% to $632 million while full year sales jumped 15% to $2.2 billion. For the quarter 7% of the gain came from an increase in organic sales.

Fluid handling, the largest segment, saw the biggest sales gain of the segments in the quarter, rising 14% to $297.5 million.

The order backlog grew to $778 million at the end of December 2011 compared to $768 million the year before.

Earnings actually missed on the quarter. EPS was 88 cents compared to the consensus at 90 cents. It was the first miss in the last 8 quarters.

The year saw record earnings of $3.43 per share and margins which expanded to 12.3% from 11% in 2010.

2012 Guidance

Crane is forecasting further growth in 2012.

Sales are expected to rise 3% to 5% with core sales increasing 5% to 6%.

Earnings are projected to be in the range of $3.75 to $3.95, as all segments are expected to see sales growth.

Zacks Consensus Estimates Rise

One estimate has moved higher for 2012 in the past 30 days. The 2012 Zacks Consensus Estimate has jumped $3.92 from $3.87 in the last 3 months.

That is at the high end of the company's guidance range.

It is also earnings growth of 14.2%.

Valuations Still Solid

Crane usually trades with attractive valuations even when the share price has been rising.

It continues to be a value stock with a P/E under the average for the S&P 500.

However, it does have a price-to-book ratio of 3.4, which is a little hotter than I'd like to see. I usually use a cut-off of 3.0 for value.

In addition, the company has a 1-year return on equity (ROE) of 19.8% which easily crushes the average of the S&P 500 of 13.4%.

Crane is a company that offers investors attractive value fundamentals in addition to double digit earnings growth. That's a magical combination.

This Week's Value Zacks Rank Buy Stocks

The Texas economy is still hot. Conn's Inc. (CONN), a specialty retailer with most of its stores in the Lone Star state, is expected to post triple digit earnings growth in fiscal 2012. This Zacks #1 Rank (Strong Buy) is a growth stock that also has value. It trades with a price-to-sales ratio of just 0.7. Read the full article.

The transportation companies are at the front lines of the resurgent US economy. Saia Inc. (SAIA) is expected to grow earnings by 65% in 2012. This Zacks #1 Rank (Strong Buy) is also a value stock with a P/B ratio of only 1.2. Read the full article.

I'm always looking for hidden gems. FSI International (FSII), a maker of wafer cleaning equipment, recently posted a big earnings surprise for the fiscal second quarter. This Zacks #1 Rank (Strong Buy) has both growth and value characteristics with a juicy PEG ratio of just 0.6. Read the full article.

The retreat of the crack spreads has caused havoc among the refining stocks. Delek US Holdings, Inc. (DK) faces headwinds in 2012 as that spread comes back to earth. But this Zacks #1 Rank (Strong Buy) is still cheap, with a forward P/E of 6.9. Read the full article.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

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