Shares of CLARCOR Inc (CLC) reached a new 52-week high, touching $68.67 during the trading session on Dec 24, after gaining momentum on encouraging third-quarter results. However, the stock closed the session at $68.32, which reflects a year-to-date return of 8.5%.
Despite its strong price appreciation, this Zacks Rank #3 (Hold) stock has plenty of upside left, given its strong fundamentals. Currently, the stock is trading at a forward P/E of 20.6x and has long-term earnings growth expectation of 11.7 %.
Growth Drivers
Impressive third-quarter results, accretive acquisitions, new products explorations and improving operational activities were the primary drivers for the stock.
CLARCOR has been active on the acquisition front and purchasing companies that align with its business strategies. In addition, the company remains committed to its strategic initiatives which include expanding profitably in international markets and exploring new products and customer development activities.
Recently, CLARCOR announced that it has acquired Filter Resources, Inc., Filtration Inc and Fabrication Specialties, Inc. for an undisclosed amount. The companies manufacture and distribute filters to the petrochemical and refining industries in the Texas Gulf Coast and Louisiana region. Post acquisition, the acquired business will be a part of CLARCOR’s PECOFacet group of companies. Together PECOFacet group and Filter resources are likely to help CLARCOR deliver better filtration solutions for refineries and petrochemical customers throughout the gulf coast.
Moreover, on a previous occasion, the company had acquired General Electric Company’s (GE) air filtration business, the Stanadyne fuel filtration business, and the Bekaert advanced filtration business, which are likely to augment its market share and revenues.
Encouragingly, in the last reported quarter, CLARCOR generated sales growth of 38% and earnings per share grew 44% year over year. The increase in revenues was driven by strong organic growth from the base business and recent acquisitions. Prompted by its acquisitions and strong organic growth, CLARCOR increased its full-year earnings guidance to $2.79–$2.85 per share from $2.72–$2.82 per share, guided earlier.
Other Stocks to Consider
Other stocks worth considering in the industry include Federal Signal Corp (FSS), carrying a Zacks Rank #1 (Strong Buy) and Carlisle Companies Incorporated (CSL) carrying a Zacks Rank #2 (Buy).
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