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Taking a look at the USAToday list of top % gainers on the NYSE, I came across Flowserve Cp (FLS) which closed today at $23.90, up $2.07 on the day or 9.48%. I do not own any shares nor do I have any options or leveraged positions in this company. According to the Yahoo "Profile", FLS "...develops and manufactures precision-engineered flow control equipment for critical service applications that require high reliability, including pumps, valves and mechanical seals."
As I have noted on many occasions on this website, what often drives a stock higher on any given trading day is often the release of good news, especially earnings news. Today, just before the opening of trading, FLS announced 2nd quarter 2004 results. Second quarter sales increased 7% to $654.6 million. Net income came in at $18.4 million or $.33/share compared with $15.3 million or $.28/share the prior year.
Taking a look at a longer-term view, we can see with Morningstar's "5-Yr Restated" financials, that revenue has grown nicely from $1.1 billion in 1999 to $2.4 billion in 2003. Earnings have been less consistent dropping from $.32/share in 1999 to a loss of $(.27)/share in 2001, and increasing sequentially to the latest report.
Free cash flow, which was a negative $(83) million in 2001, has improved to $155 million in 2003. The balance sheet looks good with $53.5 million in cash and $1.04 billion in other current assets, as opposed to $632.7 million in current liabilities and $1.35 billion in long-term liabilities.
What about valuation? If we take a look at "Key Statistics" from Yahoo, we see that the market cap is a mid-cap $1.32 Billion. The trailing p/e is a moderate 23.76 with a forwards p/e (fye 31-Dec-05) of 15.42. Thus, the PEG is a very nice 1.14, and the Price/Sales is 0.49.
Yahoo reports that there are 55.27 million shares outstanding and of these, 54.60 million of them float. There is a modest 997,000 shares out short as of 7/8/04 representing 2.724 trading days. No cash dividend is paid per Yahoo, and the last stock split was a 3:2 in March, 1994.
How does the chart look? If we look at a Point & Figure chart from Stockcharts.com:
we can see that this stock initially traded higher from $12.50 in May, 2001, and peaked at $36.00 in May, 2002. From that point it traded lower, bottoming at $8.00 in October, 2002, and since that time has traded steadily higher above its current support level. The stock looks good but not over-valued chartwise, in my amateur humble opinion. Again, I am not a technician, so if anyone else has a different opinion on this, please let me know.
Overall, I like this particular stock just fine. The latest earnings report is solid if not spectacular, the recent earnings growth has been steady the last few years. Free cash flow is solidly positive. The balance sheet looks just fine. And the valuation is great with a PEG just over 1.0 and a price/sales under 1.0. The chart looks fine and not at a point that the price has gotten way ahead of itself.
Now, if only I could sell one of my existing positions at a gain! Then I could BUY something new! Currently in my Trading Portfolio, I am down to about 19 positions, so I have room for six more.
Again, thanks for stopping by! If you have any questions, comments, or words of encouragement, please feel free to email me at firstname.lastname@example.org .