Badger Meter, Inc. (BMI) has been rallying for the last 3 months on strong first-quarter results, higher estimates and cost cutting initiatives.

Company Description

Badger Meter, Inc. develops and manufactures flow measurement and control products for water utilities, municipalities and industrial customers worldwide. The company was founded in 1905 and has a market cap of $577 million.

First-Quarter Results

Badger reported solid first-quarter results on Apr 20 that were better than expected. Sales were down a marginal 4.5% from last year to $65.2 million. Income came in at $6.9 million, up from $6 million last year, producing earnings of 47 cents per share against the consensus of 38 cents.

Badger noted that its results were helped by a number of factors, including cost cutting, lower costs for materials like copper and a stronger dollar.

Estimates Jump

Analysts boosted their earnings estimates after the solid quarter, with the current-year estimate climbing 38 cents to $1.88 per share. The next-year estimate is up 31 cents in the same time to $1.97, a respectable 5% earnings growth projection.

Valuations

Based upon the current-year estimate, this stock has a P/E multiple of 20X, a premium to the overall market.

The Chart

Shares of BMI have been advancing since bottoming out in early March with the overall market just above $23. Since then, this stock has topped the $43 mark, having since pulled back a bit. Take a look below.

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