Valspar Corp. (VAL) shares have performed very well during the recent market downturn. Its stock is now less than a dollar below its 52-week high.The impressive performance of its stock was due to strong second-quarter results that it reported in mid-May. The company continues to generate higher sales volumes, while keeping its costs under control. This is producing more profitable sales and explosive earnings growth.
Growth and Income
The company is expected grow it EPS 25.0% in fiscal 2010, 10.0% in fiscal 2011, and 10% per year for the long term. The stock also offers investors a dividend yield of 2.0%.
This Zacks #1 Rank stock trades at a reasonable 14.7x fiscal 2010 consensus EPS estimates and 13.4x fiscal 2011 consensus EPS estimates.
Business
Valspar manufactures and distributes coatings, paints, and related products primarily in the U.S., China, and Europe.
For the last two years, Valspar has focused on improving its operational excellence by consolidated plants, reducing headcount, rolling out new products, and managing raw material costs.
Fiscal Second-Quarter ResultsLast month, the company announced total sales of $803.6 million, up 20% from the year-ago period. Adjusted net income per share was $0.61, up 69.4% from the year-ago quarter, and 18 cents above the Zacks Consensus Estimate.
Chairman and CEO William Mansfield said that "volume growth in combination with operating discipline and tight control of expenses were the main drivers of our earnings performance."
Company Outlook
Management also upped its guidance for fiscal 2010.
The company expects earnings per share of $2.10-$2.25, up from its previous guidance of $1.85-$2.05. Note: guidance excludes restructuring charges.
Estimates
After the company's strong Q2 report and bullish guidance for 2010, estimates increased 17 cents for fiscal 2010 and 18 cents for fiscal 2011.
In the last five quarters, Valspar has beaten the Zacks Consensus Estimate by an average of 23.0%.
The Chart
Valspar shares are up 49% since bottoming out in July 2009. The stock topped out in late April and early May. It has held up well during the recent market downturn. VAL shares have traded between $29 and $33. The stock is now just 1.8% below its 52-week high of $33.13.
No comments:
Post a Comment