Johnson Outdoors (JOUT - Snapshot Report) had first-quarter results that were well ahead of expectations and sent estimates higher. But, shares have been slow to react, leaving JOUT with great valuations to go along with impressive growth rates.
Currently Johnson Outdoors is a Zacks #1 Rank (Strong Buy) and should make a solid long-term investment.
Company Description
Johnson Outdoors is an outdoor recreation company. The company has 4 segments, Watercraft, Marine Electronics, Diving and Outdoor Equipment.
Sales Still Growing
On Feb 4 Johnson Outdoors said fourth-quarter sales were up 12%, to $78.7 million as consumer demand continues to recover. The company posted a net loss of $1.2 million, about a third of the period a year ago. Most retailers post a loss in the first quarter, so that is now surprising.
The loss worked out to $0.13 per share, well ahead of the $0.45 last year. Johnson Outdoors said higher volume and efficiency lead to the better than expected results, analysts were looking for a $0.32 loss. Additionally, the company was able to reduce its net debt by about 33%, to $14.1 million.
Estimates Jump
Full-year estimates jumped on the earnings news, rising 20 cents to $1.25 for this year. Next year's estimates are at $1.70. Last year Johnson Outdoors made $0.68 per share, putting expected growth rates at 83% and 37%.
The long-term earnings trend shows just how much the company has turned around moving through the recession. Just 3 months ago, the Zacks Consensus Estimates were at $0.65 and $0.30, respectively.
Valuations Look Good
Shares of JOUT are trading at a nice discount as well. The forward P/E is about 12 times and its price to sales is 0.38. Both marks are ahead of the average for its peer group. Currently Johnson Outdoors is the top rated of the 17 companies in the leisure and recreational products industry.
The Chart
Given the thin coverage by analysts the estimates can be volatile. But take a look below. You can see the projections are the highest they have ever been, yet shares have not come up as far. It may take some time for this trade to pan out, but given the earnings momentum and valuations, this should be a great long-term play.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service
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