Brunswick Corp - Momentum
April 05 2011 - 8:00PM
Zacks
Brunswick Corp (BC) has been hot for the last months,
jumping from $16 in early December to a recent multi-year high
above $26. With four consecutive earnings surprises and a bullish
growth projection, this Zacks #1 rank stock throws a recreational
twist into the momentum faction.
Company Description
Brunswick Corp operates as a diversified recreation
products company, specializing in products like boats, boat
engines, billiards and fitness programs worldwide. The company was
founded in 1844 and has a market cap $2.29 billion.
With the domestic and global economies showing more
signs of stability over the last six months, consumers have become
more comfortable spending on highly discretionary items like boats
and billiards. That trend lifted Brunswick to strong Q4 results in
late January that came in ahead of expectations.
Fourth-Quarter Results
Revenue for the period was up 11% from last year to
$729 million. Earnings also came in ahead of expectations at a loss
of 94 cents, outpacing the Zacks Consensus Estimate by 10%.
The quarter was led by Brusnwick's largest segment,
Marine Engines, where sales were up 17% from last year to $302
million. Sales in its boat segment were also on the upswing,
increasing 7% from last year to $153 million.
Financial Profile
But in spite of the turbulent economy of the last
few years, Brunswick still has a very solid balance sheet, with
cash and equivalents of $551 million and total debt of $831
million.
Estimates
We saw some movement in estimates on the good
quarter, with the current-year estimate up one cent to 27 cents
while the next-year estimate added 2 cents to $1.11, a very bullish
319% growth projection.
Valuation
Based upon the bullish 2012 earnings projection, BC
trades with a forward P/E of 23X, a premium to its peers and the
S&P 500.
6-Month Chart
On the chart, BC has been strong for the last 4
months, recently hitting a new multi-year high at $26.52. Look for
support from the trend line on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist
for Zacks.com. He is also the Editor in charge of the Zacks
Momentum Trader Service.
BRUNSWICK CORP (BC): Free Stock Analysis Report
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