NN Inc. Touches a New 52-Week High - Analyst Blog

Shares of NN Inc. NNBR reached a new 52-week high of $24.79 during its trading session on May 28. The new 52-week high improved marginally fromthe last one of $24.76 hit on May 27.

NN Inc. closed the day at $24.70 on May 28, reflecting a solid year-to-date return of 167.6%. The trading volume for the session was 0.29 million. Better-than-expected results for first-quarter 2014 triggered positive revision in earnings estimates for 2014 and 2015. This, along with a solid year-over-year earnings growth expectation for 2014 and 2015, indicates further upside potential for the company.

Growth Drivers

NN Inc. reported earnings of 31 cents per share, reflecting an increase of 47.6% from 21 cents per share reported in the year-ago quarter. Also, the bottom-line results surpassed the Zacks Consensus Estimate of 25 cents per share by 24.0%.

Revenues generated were $102.5 million, up 9.3% year over year. The top-line growth was partially offset by 7.7% increase in cost of sales. Gross profit increased 15.4% while gross margin rose 110 basis points to 21.7%.

Also, NN Inc. is focused to rewarding its shareholders through regular dividend payments. Recently, the company's board of directors approved disbursement of 7 cents per share quarterly dividend on Jun 20, to shareholders of record as on Jun 6, 2014.

Stellar quarter-performance and a healthy capital deployment policy of NN Inc. make us hopeful of a better quarter performance going forward.

Estimate Revisions Show Potency

Over the last 30 days, the Zacks Consensus Estimate for NN Inc. has increased by 4.5% to $1.40 for 2014 and by 9.9% to $1.78 for 2015. The consensus estimate also depicts a year-over-year growth rate of 35.9% for 2014 and 27.1% for 2015.

NN Inc. currently has a market capitalization of $438.0 million and sports a Zacks Rank #1 (Strong Buy). Other players worth considering in the machine tools and accessories industry include Norsk Hydro ASA (NHYDY), Northwest Pipe Co. NWPX and Timken Co. TKR. All these stocks carry a Zacks Rank #2 (Buy).