Actuant Corp. - Aggressive Growth

Actuant Corp. (ATU) has strung together 7 earnings surprises as both the top and bottom lines continue to improve. In addition, a recent acquisition led to a buying frenzy.

Those factors have lead to nice upward estimate revisions, pushing shares to a Zacks #1 Rank (Strong Buy).

Company Description

Actuant is an industrial company that operates in over 30 countries through a variety of markets. The company offers hydraulic and electrical tools, as well as other related products and services.

Another Surprise

I originally featured Actuant back in October and since then the company has posted yet another earnings surprise, making it 7 in a row. The announcement came on Dec 16 and included EPS of 36 cents, nearly double the 19 cents from a year ago. Analysts were looking for 34 cents.

Revenues for the period were up 34%, to $87.4 million. If you strip out acquisitions, and other adjustments, you still have core growth of roughly 14%. Solid top and bottom line growth? Sounds good to me.

Raising Guidance

One aspect that can go toe-to-toe with EPS when it comes to quarterly reports is the company's outlook. In this release the CEO for Actuant raised the outlook thanks to encouraging trends and other favorable variables.

So, analysts followed suit. The Zacks Consensus Estimate for fiscal 2011 is up 13 cents, to $1.55. Next year's forecasts rose 20 cents, to $1.84.

After earning $1.08 in fiscal 2010, the annual growth rates are expected to be 43% and 19%, respectively.

Newest Purchase

On Dec 10 the company finished its acquisition of Mastervolt. The Amsterdam-based electronics company was bought for $150 million in cash and using the revolving credit facility.

The Chart

You can see that shares were stuck in a range for most of October and November, but the announcement of the previously mentioned acquisition was enough to bring in plenty of buyers.

Read the October 14th Feature Here

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service

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