On May 9, 2013, shares of Waters Corp. (WAT - Analyst Report) hit a new 52-week high of $97.12, beating its previous high of $96.25 attained on Apr 11. Waters Corp. shares are currently trading at $96.42 as of closing on May, 09, reflecting a year-to-date return of 10%. .
Shares of this leading laboratory solutions provider have been riding high since it reported solid fiscal 2012 results. Recently, the company reported its first quarter 2013 results with EPS of $1.07, up 7.0% from $1.00 in the first quarter of 2012. The company’s current P/E ratio is 18.3 as compared to the 15.1 for the S&P 500 companies. Let us try to gauge the factors that propelled the stock to its 52-week high.
The company has hidden strengths in multiple areas. Waters reported earnings of $1.07 per share from continuing operations in first quarter 2013. Earnings in the quarter increased 7% from $1.00 in the year-ago quarter, benefiting from stringent cost-control and disciplined pricing initiatives. Total revenue grew 2.3% year over year to $430 million in the first quarter of 2013. As per the Zacks Consensus Estimate, revenue growth expectation for Waters is 5.26%, while earnings growth expectation is 10.07%.
In March, Waters Corp. unleashed a bunch of new and innovative products and technologies at the Pittsburgh Conference on Analytical Chemistry and Applied Spectroscopy (Pittcon). The noteworthy products unveiled include Waters ACQUITY Advanced Polymer Chromatography (APC) System, Paradigm Scientific Search Software, Quality Control Reference Materials (QCRMs) and the updated Alliance HPLC Designs. This new and improved product portfolio will definitely augment more revenue in future.
Additionally, Waters Corp. entered into a partnership with Dani Instruments for using its Empower Chromatography Data Software to control the former’s Headspace and Gas Chromatography instruments. Waters’ partnership with DANI instruments benefited the company immensely.
Waters had been consistently reporting double-digit growth in monthly sales until January this year. The company’s top-line figures increased organically due to a stable pharmaceutical demand and strong sales in Asia.
Other Stocks to Consider
Waters Corp. is expected to derive significant benefits from new product innovations in the future. Presently, Waters Corp. has a Zacks Rank #3 (Hold). Some other companies of the same sector worth considering at the moment are Aspen Technology, Inc. (AZPN - Snapshot Report) , Alliance Fiber Optic Products Inc. and Amkor Technology, Inc. (AMKR - Snapshot Report) , each carrying a Zacks Rank #1 (Strong Buy).