Robbins & Myers, Inc. - Momentum

Robbins & Myers, Inc. (RBN) recently spiked to a new 52-week high after reporting strong Q3 results in early January that included a 33% earnings surprise. With an average earnings surprise of 39% over the last three quarters and bullish growth projection, this Zacks # 1 rank stock has some solid upward momentum.

Company Description

Robbins & Myers, Inc., together with its subsidiaries, supplies engineered industrial equipment and systems for a wide variety of end markets worldwide. The company was founded in 1878 and has a market cap of $2 billion.

RBN has been strong for the last few months with the market, but shares got an extra pop on January 7 after the company reported strong Q3 results that handily beat expectations.

Third-Quarter Results

Revenue for the period was up 27% from last year to $164 million. Earnings were also looked good, coming in at 44 cents, 33% ahead of the Zacks Consensus Estimate.

The company noted that it was seeing strong gains from its energy markets, where domestic exploration and production companies are investing in technology to exploit shale resources. That led to a 50% gain in its fluid management business, up 50% to $102 million.

It also noted that it has been experiencing stable demand from the developed economies of the world and more aggressive growth fro, the emerging markets.

Financial Profile

RBN will also continue to benefit from its strong financial profile, with cash and equivalents of $144 million and no debt.

Estimates

Estimates took a nice jump off the good quarter, with the current year adding 51 cents to $2.12. The next-year estimate added 50 cents to $2.49, a solid 17% growth projection.

Valuation

But in spite of the gains, the valuation picture still looks good, with a forward P/E of 19X against the industry average of 20X.

12-Month Chart

On the chart, RBN jumped higher on the good quarter to hit a new multi-year high at $42.55. But in spite of the gains, the stochastic below the chart is signaling that shares are trading safely away from over-bought territory. Look for support from the long-term trend on any weakness, take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
 
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