5 Industrial Stocks Hitting 52-Week Highs

NEW YORK ( TheStreet) -- Shares of these industrial stocks reached 52-week highs on Wednesday: Watsco ( WSO), RSC Holdings ( RSC), Eagle Materials ( EXP), Applied Industrial Technologies ( AIT) and Kennametal ( KMT).

These stocks hit new highs on the same day that homebuilder confidence rose for the fifth straight month. The National Association of Housing Builders market index came in at 29 in February, which topped estimates and exceeded January's reading of 25.

Watsco

The heating, air conditioning and refrigeration equipment company reported fourth-quarter earnings of $13 million, or 39 cents a share, on Wednesday. The performance was an increase from year-ago earnings of $10 million, or 31 cents. Analysts, on average, expected a profit of 35 cents a share.

"We expect a better HVAC market in 2012 as price/mix appears to have normalized and Watsco should have success with several company-specific growth initiatives," William Blair analysts wrote following the report.

Shares of Watsco hit a 52-week high of $74.13 on Wednesday. The stock's 52-week low of $50.45 was set on Oct. 4.

Watsco shares trade at a forward price-to-earnings ratio of 20.1X; the average for building materials and fixtures companies is 39.3X. For comparison, Lennox International ( LII) has a lower forward P/E of 12.7X and Martin Marietta's ( MLM) forward P/E is 12.7X.

Seven of the 12 analysts who cover Watsco rate it a buy. Three are at hold and the other two are at sell.

TheStreet Ratings gives Watsco a B+ grade with a buy rating and has a $82.44 price target on the shares. The stock has risen 12.05% year to date.

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RSC Holdings

The construction equipment rental company announced Wednesday that it got a "no-action letter" from the Canadian Competition Bureau regarding its acquisition by United Rentals ( URI).

Shares of RSC Holdings hit a 52-week high on Wednesday of $22.40. The stock's 52-week low of $6.26 was set on Aug. 22.

RSC has a forward P/E of 19.3X; the average for industrial suppliers is 16.9X. For comparison, Barnes Group ( B) and Kaman ( KAMN) both have lower forward P/Es of 14.8X and 14X respectively.

Of the 10 analysts who cover RSC, nine have a hold rating on the stock and one has a sell rating.

RSC gets a C grade and a hold rating from TheStreet Ratings. The stock has risen 18.97% year to date.

United Rentals also reached a 52-week high Wednesday of $12.12. The stock's 52-week low of $12.81 was set on Aug. 19.

United Rentals has a forward P/E of 10.2X; the average for business and support services companies is 21.1X. For comparison, Cintas ( CTAS) and URS ( URS) both have higher forward P/Es of 15.5X and 11X respectively.

Nine of the 12 analysts who cover United Rentals rate the stock at buy; three are at hold.

TheStreet Ratings gives United Rentals a C grade and hold rating. The stock has risen 37.66% year to date.

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Eagle Materials

The building materials company reported third-quarter earnings of $2.9 million, or 7 cents a share, earlier this month. The performance was down from a year-ago profit of $5.5 million, or 13 cents a share.

"We think a positive story is forming into 2012 around pricing in its wallboard business, and we are raising our FY12 EPS estimate from $0.40 to $0.63 and our FY13 estimate from $0.84 to $1.30, largely reflecting incremental profits from wallboard," KeyBanc Capital Markets analysts wrote in a Feb. 7 report.

Shares of Eagle Materials hit a 52-week high Wednesday of $33.98. The stock's 52-week low of $15.36 was set on Sept. 22.

Eagle Materials has a forward P/E of 27.2X; the average among building materials and fixtures companies is 44.2X. For comparison, both Simpson Manufacturing ( SSD) and Acuity Brands ( AYI) have lower forward P/Es of 20.2X and 15.9X respectively.

Eleven of the 15 analysts who cover Eagle Materials rate it a hold. Three analysts have a buy rating on the stock and one is at sell.

TheStreet Ratings gives Eagle Materials a C+ grade and hold rating. The stock has increased 29.54% year to date.

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Applied Industrial Technologies

The industrial products distribution company earlier this month acquired Solutions Industrielles Chicoutimi and Spécialités Industrielles Harvey, which are two Quebec distributors.

"AIT, a leading industrial distributor of power transmission and fluid power supplies, should continue to increase revenue over the next five years at 8% compounded through improved product offerings, increased market presence, and the unbundling of value-added services (it historically has not charged for these services), including training and inventory management," Wells Fargo analysts wrote in a report Monday. "Moreover, AIT's margin initiatives, including faster implementation of vendor price increases and improved employee productivity, should drive the distributor's improved operating performance."

Shares of Applied Industrial Technologies hit a 52-week high of $42.01 on Wednesday. The stock's 52-week low of $24.50 was set on Aug. 9.

Applied Industrial Technologies has a forward P/E of 15.3X; the average for industrial suppliers is 16.9X. For comparison, both Fastenal ( FAST) and W.W. Grainger ( GWW) have higher forward P/Es of 29.2X and 17.5X respectively.

Five of the eight analysts who cover Applied Industrial Technology rated it a hold; three gave it a buy rating.

Applied Industrial Technologies gets an A- grade from TheStreet Ratings with a buy rating and $47.46 price target. The stock has risen 17.94% year to date.


Kennametal

The engineered components supplier reported second-quarter earnings of $73.7 million, or 92 cents a share, last month. The performance was an improvement from year-ago earnings of $43.5 million, or 53 cents a share.

"While one month does not indicate a trend, we are encouraged by the solid start to the new year with sales for the month of January estimated being up 10% on a tough y/y comp (Jan 2011 est. up 30% y/y)," Jefferies analysts wrote in a report Tuesday. "We anticipated the order rate to moderate due to tougher comparisons as well as look for some fx headwind as the year progresses."

Shares of Kennametal hit a 52-week high of $46.66 on Wednesday. The stock's 52-week low of $29.30 was set on Oct. 4.

Kennametal has a forward P/E of 10.7X; the average for industrial machinery is 15.2X. For comparison, Flowserve ( FLS) and Donaldson ( DCI) both have higher forward P/Es of 13.5X and 20.4X respectively.

Nine of the 14 analysts who cover the company have buy ratings on the stock. Four analysts rate it at hold and one is at sell.

TheStreet Ratings gives Kennametal a B+ grade with a buy rating and has a $54.50 price target on the shares. The stock has increased 24.07% year to date.

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-- Written by Alexandra Zendrian in New York.

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