Flowserve Corporation (NYSE: FLS) is
a leading provider of fluid motion and control products and services. It produces engineered and industrial pumps, seals and valves, and a range of related flow management systems. Customers are in the oil and gas, chemical, general industrial, power generation, and water treatment sectors. The firm employs more than 14,000 and operates from offices in nearly sixty countries.
Flowserve pleased investors late last month, when it reported Q1 EPS of $1.53 and revenues of $993 million. Analysts had been expecting 94 cents and $930.3 million. The company posted record quarterly bookings of $1.43 billion, led by strong growth in both the original equipment and aftermarket businesses. Management also guided FY08 EPS to $5.90-$6.20, versus consensus of $5.39.
The FLS share
price popped into a bullish "flag" consolidation pattern on the news. 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 two "buys", three "holds" and one "sell". Analysts see a 17% growth rate, through the next year. The FLS Sales Growth rate (23.60%), EPS Growth rate (159.32%), Return on Assets (9.32%), Return on Investment (14.09%) and Return on Equity (25.57%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past fifty-two weeks, it has traded between $60.61 and $126.43. A stop-loss of $104.00 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.
Closing Bell: Economic Catapult for Thanksgiving & Black Friday (WMT, TGT, GRMN, GOOG, MSFT)
Deere up on Q4 earnings performance
Reid Hoffman: LinkedIn will go public (at some point)
