Earnings Trade for Donaldson Co. (DCI)

08/22/2011 12:00 pm EST


Robert Weinstein

, Weinstein Capital

Donaldson Company, Inc. (DCI) is due to report earnings before the opening bell next Monday, August 29. The stock offers an interesting trading opportunity.

Company Overview

Donaldson Company, Inc. engages in the manufacture and sale of filtration systems and replacement parts worldwide. The company operates in two segments, engine products and industrial products. The company was founded in 1915 and is based in Minneapolis, Minnesota.

52-week high: $63.04

52-week low: $40.86

Book value: $12.50

Float short: 1.35%

Analysts are expecting an improvement of $0.01 in earnings per share compared to last quarter's results of $0.79. A beat of $0.80 per share will top the estimated per-share earnings. Analyst estimates range between $0.76 and $0.82 per share.

The current trailing-twelve-month (TTM) P/E ratio is 18.3. The forward P/E ratio is 17.4.

In the last month, the stock has decreased in price by 18.45 %, and in the last quarter, it has returned -3.49% with a one-year change of 13.42%.

Comparing to the S&P 500 price changes, the price performances are -2.37% vs. the S&P 500 from a month ago, 1.52% vs. the S&P 500 from six months ago, and the year-to-date difference is -5.85% vs. the S&P 500 price change.

For the same fiscal period year-over-year, revenue has improved to $1.88 billion for 2010 vs. $1.87 billion for 2009. The bottom line has rising earnings year-over-year of $166.16 million for 2010 vs. $131.91 million for 2009. The company's earnings before income and taxes are rising with an EBIT year-over-year of $238.24 million for 2010 vs. $169.96 million for 2009.

The annual growth rate of revenue is 0.53%.

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Here’s gross reported revenue compared to the mean estimate (rounded) for previous reporting periods.

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NEXT: Earnings Per Share from Last Five Quarters


And here is earnings per share (EPS) vs. estimated. Differences are rounded. (Some one-time items are often excluded in reported EPS.)

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And finally, here are the number of shares shorted and days it would take to cover those short positions.

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The shorts have decreased in recent months, indicating traders are becoming more bullish on the stock. You could take that as a trend-following trade…or as a contrarian one.

I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar.

You may want to use this article as a starting point of your own research with your financial planner. I use Seeking Alpha, Edgar Online, Google Finance, MSN Money, CNBC, Zacks, and Yahoo Finance for most of my data.

I use the "confirmed" symbols from MoneyShow.com and Earnings.com that I believe to be of the most interest.

By Robert Weinstein of Paid2Trade.com

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