Savings Experiment: Snow Removal
The Money Man Behind Rick Santorum: Who Is Foster S. Friess?Robbins & Myers (NYSE: RBN) provides
equipment used for the industrial processing and management of fluids. Its Fluid Management segment offers hydraulic drilling equipment, slurry grinders and wellhead systems used by oil and gas, specialty chemical and wastewater treatment firms. The Process Solutions unit makes glass-lined reactors, storage vessels and mixing/agitation devices for the pharmaceutical and fine chemical markets. The Romaco segment provides equipment for the dosing, filling and sealing of vials, capsules, tubes and bottles.
Investors were pleased earlier in the week, when the firm reported fiscal Q3 EPS of 62 cents and revenues of $200.9 million. The Street had been looking for 58 cents and $190.2 million. Management also guided Q4 EPS to 62-67 cents (60 cent consensus) and FY08 EPS to $2.10-$2.15 ($2.05 consensus).
The stock
popped on the news and then moved into 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" and four "holds". Analysts see a 25% average annual growth rate, through the next five years. The RBN Price to Sales ratio (2.48), Sales Growth rate (17.22%), EPS Growth rate (63.16%) and Operating Margin (16.43%) compare favorably with industry, sector and S&P 500 averages. Institutions own about 87% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $21.59 and $50.78. A stop-loss of $42.00 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.
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