Crane Co. (NYSE: CR) is
a diversified manufacturer of industrial products, operating through five business segments. Aerospace & Electronics offers diverse microelectronic and aircraft systems. Merchandising Systems manufactures vending machines and storage devices. Engineered Materials makes fiberglass reinforced plastic and substrate materials for antennas. Controls produces valves, transducers and regulating systems. Fluid Handling provides pipes, pipe fittings and actuators. Crane serves clients in the power generation, transportation, defense, commercial construction, food and chemical industries.
The company surprised investors earlier in the week, when it reported Q4 EPS of 77 cents and revenues of $666 million. Analysts had been expecting 69 cents and $659 million. Management continued to see strong demand in Fluid Handling and expected conditions to remain robust in its long-cycle Aerospace & Electronics unit. The firm also guided FY08 EPS to $3.45-$3.60, versus Wall Street consensus of $3.41.
CR shares
popped above 30-day moving average resistance on the news and have since been defining a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with one "strong buy", one "buy", five "holds" and two "underperforms". The CR P/E ratio (11.40), PEG ratio (1.04), Price to Sales ratio (0.94), Price to Book ratio (2.78), Price to Free Cash Flow ratio (16.83) and EPS Growth rate (26.23%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 66% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $33.54 and $51.16. A stop-loss of $34.90 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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