A recent IPO has had a very strong run to begin its life. But right now the stock is basing which is offering a new safer area to take a long as this stocks sets up in a base that could lead to another powerful monster stock move.

TITN operates 34 agricultural/construction equipment stores and two outlets offering new/used tractors and other machinery and business couldn’t be better as this company continues to add companies to their portfolio of businesses with the most recent acquisition coming on 5/12 with a purchase of Mid-Land Equipment, a construction equipment dealer with 2007 revenues of
$48.3 million. The terms of the deal were not disclosed.

However, the information that is disclosed on the company indicates that this could be a fantastic long-term stock.

As we all know earnings are the most important driver of a stock price.
When it comes to TITN’s earnings, they simply don’t get much better with the last six quarters EPS growth coming in at 20%, 100%, 60%, 60%, 250%, and 109% the past six quarters.

Sales have been even more impressive with growth the past eight improving from 13%, 13%, 39%, 47%, 28%, 28%, 67%, and 61%.

That growth in EPS and sales are extremely powerful and to see them both rise in the two most recent quarters after such strong growth already is a very bullish development that I will continue to monitor. The estimates for
2009 are for a gain of 32% and for 2010 are for a gain of 18% and those estimates as long as their business continues to do well should be raised in the future.

Especially with a 73% growth rate, a ROE of 18%, a cash flow of $0.78 to an EPS of $0.23 the most recent quarter. Debt is only 19% of the shareholder equity, earnings stability is 18, and the p/e ratio is a high 41 but that is actually a bullish number as the best growth stocks always carry higher p/e ratios as funds buy the stock based on future EPS earnings estimates and not on current earnings.

In Investors Business Daily the ratings don’t get much better with an EPS rating of 99, a RS rating of 99, a group RS rating of 84, an SMR rating of A, an Acc/Dis rating of C+, a composite rating of 97, a timeliness rating of A, and a sponsorship rating of D.

Despite the mutual fund sponsorship being a D, funds are still finding this stock to their holdings as mutual fund ownership has increased from 11 funds owning this stock to 14 taking a stake in this huge growth machine.

This stock is best to be bought on pullback to the 50 day moving average but I am a little bit more aggressive and will look to add to this gem with a heavy volume breakout from his current ascending.

At the time of publication Joshua Hayes was long Titan Machinery (TITN)

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