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TheStreet Open House

Why Woodward (WWD) Stock Soared Today

Stock quotes in this article: WWD

NEW YORK (TheStreet) -- Shares of Woodward  (WWD) soared 11.46% to $49.79 on heavy trading volume today.

The diversified manufacturing company raised its financial outlook for fiscal 2014 to a range of $2.35 and $2.45 per share, up from its previous expectation of $2.10 to $2.30 per share.

Analysts polled by Thomson Reuters currently estimate earnings of $2.24 per share for 2014.

Must Read: Warren Buffett's 25 Favorite Growth Stocks

Woodward cites an increase in sales orders and cost control initiatives.

Separately, TheStreet Ratings team rates WOODWARD INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate WOODWARD INC (WWD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • WOODWARD INC has improved earnings per share by 8.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WOODWARD INC increased its bottom line by earning $2.10 versus $2.01 in the prior year. This year, the market expects an improvement in earnings ($2.26 versus $2.10).
  • The current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 51.30% to $80.21 million when compared to the same quarter last year. In addition, WOODWARD INC has also vastly surpassed the industry average cash flow growth rate of -4.93%.
  • The net income growth from the same quarter one year ago has exceeded that of the Machinery industry average, but is less than that of the S&P 500. The net income increased by 5.5% when compared to the same quarter one year prior, going from $42.45 million to $44.80 million.
  • You can view the full analysis from the report here: WWD Ratings Report
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