Updated Research Report on Middleby - Analyst Blog

On Mar 7, 2014, we issued an updated research report on The Middleby Corporation MIDD. The company delivered robust earnings per share in the fourth quarter of 2013, which increased 29% year over year to $2.62. Quarterly revenues of $377.4 million were also up 29% year over year. Margins improved significantly in the reported quarter, led by a healthy top-line growth.

The company is hugely benefiting from accretive acquisitions. In the reported quarter, Middleby acquired Celfrost, Automatic Bar Controls and Wunder-Bar, which accounted for 20.8% of the sales growth. Subsequent to the quarter end, Middleby also acquired Market Forge to extend its footprint in the steam cooking industry.

The company is foraying into markets like cold-side brands, steam cooking and beverages while growing in its hot-side brands. Middleby is also gaining tractions in international markets through product launches.

In the reported quarter, the company's international revenues rose 15% year over year. The company is expected to witness higher overseas demand as new customers are planning to develop more operations in the international arena.

The strong results and guidance led to positive estimate revisions for 2014 and 2015 over the past 30 days. This led to a 3.5% increase in the Zacks Consensus Estimate for 2014, which is now pegged at $10.17. The Zacks Consensus Estimate for 2015 is up 16.6% over the same time frame and now stands at $11.95.

Key Picks from the Sector

Middleby currently carries a Zacks Rank #2 (Buy). Other stocks worth a watch in the industry include Kadant Inc. KAI, Sun Hydraulics Corp. SNHY and Graco Inc. GGG. While Kadant and Sun Hydraulics Corp. sport a Zacks Rank #1 (Strong Buy) each, Graco has the same Zacks Rank as Middleby.