Buzz Stock of the Day: ITT Corp. (ITT)

Posted on Wednesday, March 18th, 2009

Last week, engineering giant, ITT Corp. (NYSE: ITT) announced a $317 million order from the U.S. Naval Systems Command for the company’s vehicle receiver jammers–vehicle-mounted systems that prevent the detonation of improvised explosive devices, or IEDs.

According to a recent news release, the contract has the potential to swell to $1.7 billion.

In addition to its work with the armed forces, ITT has a great foothold in the infrastructure market, particularly in water treatment.

ITT’s vice president of business development, Colin Sabol recently stated: “Communities around the country, from major metropolitan cities to rural small towns, are now working to secure funds to launch much-needed infrastructure projects, such as drinking water and wastewater projects,” said Colin Sabol, vice president of business development for ITT’s Fluid Technology business. “ITT has extensive experience with the planning and creation of such projects, and measuring how project success produces benefits to the health and economy of a community.”

ITT Corp.’s stock has outperformed the S&P 500 over the last 52 weeks. With a trailing p/e of 9 (which is in line with many of the company’s competitors), operating cash flow of about $1 billion (ttm), quarterly revenue growth (yoy) of more than 16 percent, and shares trading near their 52-week low, this could be a good time to consider ITT Corp. for your portfolio.

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Buzz Stock of the Day: Pentair (PNR)

Posted on Tuesday, March 17th, 2009

Last month, Sterne, Agee & Leach analyst Michael Coleman raised his price target to $23, from $20 for the Minneapolis-based Pentair, Inc. (NYSE: PNR).

Coleman stated in a note to investors that Pentair, which manufactures water treatment and storage systems for customers around the world, “is better positioned than many industrial companies to achieve relative earnings outperformance in 2009 due to significant (and early) restructuring actions taken year-to-date and in (the fourth quarter).” Management expects its cost-cutting measures from workforce reductions alone to produce annual savings of $85 million starting this year, growing to $95 million to $100 million in 2010.

Pentair has a trailing P/E of 8.7, which is below the industry average of 9.1–a possible indication that shares may be undervalued at current levels. The company’s stock outperformed S&P 500 over the last year. Pentair has an operating margin of 11.6 percent, which is in line with several of the company’s competitors’ operating margins. Pentair also pays a dividend, which it has regularly increased for more than three decades. The company’s full-year guidance calls for earnings between $1.70 and $2.00 per share.

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Buzz Stock of the Day- Buffalo Wild Wings (BWLD)

Posted on Monday, March 16th, 2009

Here’s a pretty funny commercial for our Buzz Stock of the Day’s restaurant chain.

Cold beer, hot wings, and sports are usually key ingredients for a good time–especially in places where there isn’t all that much to do.

Buffalo Wild Wings, Inc. (Nasdaq: BWLD) runs 567 sports bars/restaurants in 39 states. As expected, the company’s restaurants attract sports fans, a group that seems to be spending money despite recessionary pressures. The Minneapolis-based Buffalo Wild Wings, reported a 33 percent boost in Q4 revenue, outstripping the verage 18 percent gain of companies in the hotels, restaurants, and leisure industry. Net profit climbed 29 percent, and EPS have increased year over year in the past eight quarters. Same store sales (a key metric for companies in the restaurant industry) at company owned restaurants increased 8 percent in January, and sales at franchise locations were up 7 percent.

“At some point it seems battle-fatigue sets in and, as a protective conditioned-response, consumers look for an escape,” said Morgan Keegan analyst Bob Derrington in a note to investors. “Restaurant dining can provide that escape.”

Derrington stated that although traffic at restaurants may be down, compared to a year ago, same store sales, or sales at stores open at least a year, are holding up relatively well.

Consumers’ desire for comfort and an escape from the daily drudgery could result in continued growth for Buffalo Wild Wings. Shares of BWLD are up about 71 percent over the past 12 months. The company has an operating margin of about 9 percent, and had operating cash flow of $66 million, on revenue of $422 million (ttm).

Can 2009 be another break out year for BWLD?

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Buzz Stock of the Day: Energy Conversion Devices (ENER)

Posted on Friday, March 13th, 2009

The majority of analysts that cover Energy Conversion Devices (Nasdaq: ENER) rate the stock a “hold,” and for good reason.

Market adoption for the company’s photovoltaic thin film technology is growing. The light-weight, flexible laminates are “ideal for commercial and residential rooftop and building integrated PV installations, both of which offer significant growth opportunities,” according to Raymond James (NYSE: RJF) analyst Pavel Molchanov, who has a $37 price target for ENER and projected an EPS growth rate of 25 percent over the next three-years.

ENER could also be one of the big winners from the Obama administration’s stimulus plan. New federal incentives will allow many Americans to immediately lower the price of electricity by installing solar panels on their rooftops, and recoup 30 percent of the installation costs through U.S. treasury grants.

Market sentiment for the Energy Conversion Devices’ prospects is positive, as well. According to the Motley Fool, roughly 93 percent of CAPS members were bullish on ENER, despite the fact that the company cut its June fiscal year revenue guidance from the $455 million to $485 range to a range in the low $400’s.

Shares of ENER are actually up on a trailing-12-month basis, and have outperformed the S&P 500 over the last . The Company has a 67.6 percent gross profit margin, a 7.3 percent return on equity (yoy) and is sitting on about $433 million in cash.

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Buzz Stock of the Day: Jacobs Engineering Group (JEC)

Posted on Thursday, March 12th, 2009

We love movie trailers, so here’s one for our Buzz Stock of the day:

Jacobs Engineering Group (NYSE: JEC) provides technical, professional, and construction services to industrial, commercial, and governmental customers around the world. The $5 billion company has an operating margin of about 5.6%, and operating cash flow of $539 million.

The Motley Fool listed Jacobs as a stock for the next Great Depression. A key characteristic for these companies to have is the ability to stay out of the debt crisis that’s bringing sectors like finance, automotive, and homebuilding to their knees, according to the Fool.

Jacobs is in a sweet spot of the market–infrastructure–has a definite tailwind, and could be one of the big winners from the new administration’s stimulus plan.

Jacobs reported earnings of $116.4 million, or $0.94 a share in Q1 2009, up more than 18 percent compared with the same quarter last year. The company also increased its backlog by more than $1 billion from a year ago. Jacobs was listed as one of our Top 10 stocks to own in 2009, and we stand by our claim. Expect Jacobs to be one of the big winners of President Barack Obama’s stimulus plan, and out perform the S&P 500 this year.

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