Lindsay Corporation (NYSE: LNN) manufactures
automated agricultural irrigation systems. Offerings include center pivot and lateral move systems, as well as hose reel travelers and mini-pivots. The firm also makes chemical injection systems, remote monitoring products and irrigation controls. Lindsay's systems are sold through a worldwide network of dealers to farmers in more than 90 countries. Wholly owned Lindsay subsidiaries make movable barriers for traffic management and crash cushions for improved highway safety.
The company pleased investors earlier in the month, when it reported fiscal Q2 EPS of 79 cents and revenues of $108.4 million. The Street had been expecting 47 cents and $83.4 million. The CEO noted, "With the current USDA forecast of a second consecutive year of record net cash farm income in 2008, we believe domestic demand for our irrigation products will remain robust. International demand is also expected to increase on the strength of higher agricultural commodity prices and global agricultural development." Boenning & Scattergood subsequently upgraded the shares to "market outperform".
The stock
popped on the news and has since been consolidating the gain in a bullish "flag" pattern. Prices frequently exit flags 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 "buy" and one "hold". Analysts see a 27% growth rate, through the next year. The LNN Sales Growth rate (70.17%), EPS Growth rate (276.19%), Return on Assets (9.88%) and Return on Investment (12.82%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 94% of the outstanding shares. Over the past 52 weeks, the stock has traded between $29.55 and $107.40. A stop-loss of $88.50 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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