MIDCAP-Australia's Forge Group leads industrials on analyst revisions
Construction contractor Forge Group Ltd stands out on analyst revisions among 66 companies in the Australia's industrials sector, data from Thomson Reuters StarMine showed.
The data covers firms tracked by at least three analysts.
The company has a near perfect Analyst Revision (ARM) score of 99 and as well as high Earnings Quality (EQ) and Value Momentum (Val-Mo) scores of 100 and 95 respectively. A high EQ score implies strong earnings sustainability.
Forge's gross margin and free cash flow for 2011 beat industry average by 40.9 percent and 10.6 percent respectively. Its forward 12 month P/BV ratio exceeds that of its peers by 21 percent. The stock currently trades at 40 percent of its instrinsic value of A$9.75.
All three analysts tracking the stock rate it a "strong buy" or "buy". The stock is down nearly 20 percent year-to-date while the broader index is up 7.23 percent for the same period as of Friday's close.
On the other end of the spectrum, Macmahon Holdings lags the Aussie industrials sector on analyst revisions with an ARM score of 1.
Forge Group, which appointed a new CFO last month, had said it won two contracts worth about $350 million from Rio Tinto Ltd .
In August, the company posted a 24 percent growth in full-year net profit before tax at $70.1 million, and that it had a "considerable volume" of work in hand with a very strong order book of about $900 million.
StarMine's Analyst Revision Model ranks stocks based on analysts' revision of earnings and revenue estimates and changes in their ratings and usually gives additional weight to analysts who have been more accurate in the past.
A high score on StarMine's Earnings Quality model signals strong earnings sustainability over the next 12 months based on a company's past operating performance.
StarMine's Val-Mo model combines relative and intrinsic valuation tools, along with analysts' earnings revisions and price momentum tools. It provides a 1-100 percentile ranking of stocks. (Reporting By Reshma Apte; Editing by Gopakumar Warrier)