Brunswick Corp - Aggressive Growth
November 22 2011 - 7:00PM
Zacks
Brunswick Corp (BC) operates in markets that are highly
sensitive to the economy, so this is a pretty aggressive play. But,
with earnings momentum this Zacks #1 Rank (Strong Buy) could turn
around sharply if economic worries start to fade.
Company Description
Brunswick Corp is best known for making bowling and billiard
equipment under the Brunswick name, but the company also makes
marine engines and accessories under the Mercury, Mariner, and
other brands as well as fitness equipment.
Well Ahead of Expectations
On Oct 27 the company released third-quarter results that showed
an 8% increase in sales, to $877 million. Brunswick said increasing
market share was the biggest factor on the top line and also led to
the best operating results in 5 years.
Net income came in at $4.7 million, but thanks to plenty of
charges, that comes out to EPS of $0.33. Analysts polled by Zacks
were looking for just 6 cents per share. There is a wide
discrepancy over the amount of those charges factored into the EPS
figure, but most major sources have the quarter listed as
better-than-expected.
Upward Revisions
The Zacks Consensus Estimate for this year is now at $0.72 after
upward revisions. Next year's average projection is up 12 cents, to
$1.38.
Last year the company lost $0.54 per share, so this is quite a
turnaround story this year, followed by a 92% growth rate next
year.
Valuations
Brunswick won't be luring any value investors in at these levels
though. Shares are at 12 times the 2012 estimate, but are still
trading at over 7 times book value. The price to sales of 0.4 times
is pretty good though.
The Chart
Shares of BC have been trending lower lately, but as they start
to look oversold traders may start coming in. This stock is still a
Zacks #1 Rank (Strong Buy) but this is still a highly aggressive
play.
Brunswick (NYSE:BC)
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