Parker Hannifin Corporation (NYSE: PH) manufactures
fluid power systems, electromechanical controls and related components. Its Industrial unit offers hydraulic systems, filters, sealing devices, pneumatic components and electromechanical instrumentation to OEMs in various production and processing industries. The firm's Aerospace segment provides hydraulic, fuel, and pneumatic systems used in commercial and military airframe and engine programs. The Climate and Industrial Controls division makes refrigeration and air conditioning systems. The company employs more than 57,000 people in 43 countries around the world. Eaton Corporation (NYSE: ETN) and Honeywell International (NYSE: HON) are competitors.
Investors were pleased last week, when the firm reported fiscal Q3 EPS of $1.49 and revenues of $3.18 billion. Analysts had been looking for $1.34 and $3 billion. Management pointed to growth in many key markets, including aerospace. The firm also guided FY08 EPS to $5.40-$5.60, versus consensus of $5.28.
The announcement
popped PH 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 three "strong buys", two "buys" and eleven "holds". Analysts see a 19% average annual growth rate, through the next five years. The PH P/E ratio (15.12), Price to Sales ratio (1.15), Price to Book ratio (2.62), Price to Cash Flow ratio (11.05), Price to Free Cash Flow ratio (15.06), EPS Growth rate (29.57%), Return on Assets (9.98%) and Return on Investment (13.12%) compare favorably with industry, sector and S&P 500 averages. Institutions own about 84% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $58.10 and $86.56. A stop-loss of $69.20 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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Reader Comments (Page 1 of 1)
6-21-2008 @ 4:40PM
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