Titan Machinery (NASDAQ: TITN) owns and operates one of the largest networks of full service agricultural and construction equipment stores in North America. The chain includes 48 dealerships in North Dakota, South Dakota, Minnesota, Iowa and Nebraska, each representing one or more of the CNH Global (NYSE: CNH) equipment brands. The firm sells new equipment, rents a range of machines and provides parts and repair services. Deere & Company (NYSE: DE) is a major competitor.

The company pleased investors earlier in the week, when it reported fiscal Q1 EPS of 24 cents and revenues of $152.6 million. Analysts had been looking for 13 cents and $119.6 million. Management also guided FY09 EPS to 86-91 cents (79 cent consensus) and FY09 revenues to $575-$625 million ($588.55M consensus). The CEO cited a strong agriculture economy and solid demand for large agricultural equipment in support of the favorable outlook.

The stock 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 "strong buys". The TITN Price to Sales ratio (1.08), Sales Growth rate (91.14%), EPS Growth rate (99.58%), Operating Margin (14.24%) and Return on Investment (11.53%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 32% of the outstanding shares. Since going public last December, the stock has traded between $9.18 and $33.11. A stop-loss of $27.15 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.