World Fuel Services Corporation - Value
August 25 2011 - 8:00PM
Zacks
World Fuel Services Corporation (INT) recently reported
record quarterly earnings as organic growth continued. This Zacks
#2 Rank (buy) has attractive valuations, with a forward P/E of
13.7.
World Fuel Services sells marine, aviation and land
fuel products to clients at more than 6,000 locations in 200
countries. Customers include airports, seaports, tanker truck
loading terminals and other storage locations.
A Record Second Quarter
On Aug 2, World Fuel Services reported its second
quarter results and easily beat the Zacks Consensus Estimate by
35%. Earnings per share were 78 cents compared to the consensus of
58 cents.
It continued an impressive earnings surprise streak
that was extended to 13 straight quarters, going all the way back
to 2008.
The aviation segment saw gross profit rise 55% to
$82 million year over year. The marine segment's gross profit rose
17% to $50.7 million while the land segment saw an increase of 182%
year over year to $32.4 million.
New Credit Facility
World Fuel Services also obtained a new $250
million 5-year term loan as well as amended and restated its
existing $800 million credit facility while extending the maturity
date to 2016.
It now has $1.05 billion of committed
financing.
Zacks Consensus Estimates Rise
Analysts like what they heard as the 2011 Zacks
Consensus Estimate rose 5 cents to $2.53 per share.
While that is earnings growth of just 4.7% over
2010, analysts expect larger growth in 2012 with earnings expected
to jump 13%.
Valuations Still Attractive
Shares have been choppy in 2011.
But they still trade at attractive valuations.
In addition to a P/E under 15, which I use as a
cut-off for value stocks, World Fuel Services also has a
price-to-book of 2. A P/B under 3.0 usually indicates "value."
It also has a really low price-to-sales ratio of
0.1. Anything under 1.0 indicates a company is undervalued.
Additionally, the company has a solid 1-year return
on equity (ROE) of 15.6%.
World Fuel Services has figured out how to run a
profitable business in these market conditions. Shares remain
attractively valued, as they are squarely in the "value stock"
category.
This Week's Value Zacks Rank Buy Stocks
The Timken Company (TKR) reported a record
second quarter as demand remained strong. This Zacks #1 Rank
(strong buy) also raised full year guidance as it expects record
sales and earnings in 2011. With the recent stock sell off, shares
are now dirt cheap at just 7.6x forward estimates. Read the full
article.
What recession? Insight Enterprises, Inc.
(NSIT) recently raised full year guidance as favorable market
conditions continued. This Zacks #1 Rank (strong buy) trades at
just 8.6x forward estimates. Read the full article.
Boston Scientific Corporation (BSX) is seen
as a turnaround story with a single digit stock price and a forward
P/E of 13. But this Zacks #1 Rank (strong buy) recently surprised
on the Zacks Consensus Estimate for the 7th quarter in a row and
raised full year guidance. Read the full article.
There are no signs (yet) of a recession from the
transports. Old Dominion Freight Line, Inc. (ODFL) reported
a record second quarter as revenue soared in the double digits.
This Zacks #1 Rank (strong buy) is a value stock with a forward P/E
of 13.6. Read the full article.
Tracey Ryniec is the Value Stock Strategist for
Zacks.com. She is also the Editor of the Turnaround Trader and
Insider Trader services. You can follow her at
twitter.com/traceyryniec.
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