CNH Global: Want that combine harvester with or without AC?

The company surprised the Street last week, when it reported Q1 EPS of 44 cents (ex-items) and revenues of $3.24 billion. Analysts had been looking for 31 cents and $3.07 billion. Management also guided FY07 EPS to $2.15-$2.30, versus Street consensus of $2.09. The next day, the U.S. Army awarded CNH Global more than $160 million to build compact track loaders and skid steers. The news popped the shares out of an early April "cup" into the late April "handle" of a Cup & Handle formation. The price is now showing signs of completing the pattern with a bullish rise from the right-hand side of the "handle".

Brokers recommend the shares with two "buys", three "holds" and a "sell". Analysts see a 33 percent growth rate, through the next year. The CNH Price to Sales ratio (0.78), Price to Book ratio (1.99) and EPS Growth rate (120.00%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about four percent of the outstanding shares. Over the past 52 weeks, the stock has traded between $18.76 and $45.22. A stop-loss of $36.90 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.