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Belden Inc (BDC) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Belden (BDC - Free Report) ? Shares have been on the move with the stock up 17% over the past month. The stock hit a new 52-week high of $92.33 in the previous session. Belden has gained 26.9% since the start of the year compared to the 7.9% move for the Zacks Industrial Products sector and the 30.1% return for the Zacks Wire and Cable Products industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 8, 2023, Belden reported EPS of $1.75 versus consensus estimate of $1.66 while it beat the consensus revenue estimate by 2.26%.
For the current fiscal year, Belden is expected to post earnings of $6.84 per share on $2.69 billion in revenues. This represents a 6.71% change in EPS on a 3.35% change in revenues. For the next fiscal year, the company is expected to earn $7.23 per share on $2.84 billion in revenues. This represents a year-over-year change of 5.7% and 5.6%, respectively.
Valuation Metrics
Belden may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Belden has a Value Score of B. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 13.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 12.6X. On a trailing cash flow basis, the stock currently trades at 10.4X versus its peer group's average of 7X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Belden currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Belden fits the bill. Thus, it seems as though Belden shares could still be poised for more gains ahead.
How Does BDC Stack Up to the Competition?
Shares of BDC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Atkore Inc. (ATKR - Free Report) . ATKR has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Atkore Inc. beat our consensus estimate by 14.11%, and for the current fiscal year, ATKR is expected to post earnings of $16.71 per share on revenue of $3.65 billion.
Shares of Atkore Inc. have gained 21.8% over the past month, and currently trade at a forward P/E of 8.85X and a P/CF of 6.03X.
The Wire and Cable Products industry is in the top 2% of all the industries we have in our universe, so it looks like there are some nice tailwinds for BDC and ATKR, even beyond their own solid fundamental situation.
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Belden Inc (BDC) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Belden (BDC - Free Report) ? Shares have been on the move with the stock up 17% over the past month. The stock hit a new 52-week high of $92.33 in the previous session. Belden has gained 26.9% since the start of the year compared to the 7.9% move for the Zacks Industrial Products sector and the 30.1% return for the Zacks Wire and Cable Products industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 8, 2023, Belden reported EPS of $1.75 versus consensus estimate of $1.66 while it beat the consensus revenue estimate by 2.26%.
For the current fiscal year, Belden is expected to post earnings of $6.84 per share on $2.69 billion in revenues. This represents a 6.71% change in EPS on a 3.35% change in revenues. For the next fiscal year, the company is expected to earn $7.23 per share on $2.84 billion in revenues. This represents a year-over-year change of 5.7% and 5.6%, respectively.
Valuation Metrics
Belden may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Belden has a Value Score of B. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 13.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 12.6X. On a trailing cash flow basis, the stock currently trades at 10.4X versus its peer group's average of 7X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Belden currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Belden fits the bill. Thus, it seems as though Belden shares could still be poised for more gains ahead.
How Does BDC Stack Up to the Competition?
Shares of BDC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Atkore Inc. (ATKR - Free Report) . ATKR has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Atkore Inc. beat our consensus estimate by 14.11%, and for the current fiscal year, ATKR is expected to post earnings of $16.71 per share on revenue of $3.65 billion.
Shares of Atkore Inc. have gained 21.8% over the past month, and currently trade at a forward P/E of 8.85X and a P/CF of 6.03X.
The Wire and Cable Products industry is in the top 2% of all the industries we have in our universe, so it looks like there are some nice tailwinds for BDC and ATKR, even beyond their own solid fundamental situation.