Highest Performing Industrial Goods Stocks in 2011

With 2011 in our rear-view mirror and 2012 here, I sifted through the noise and found the top performing industrial goods stocks of 2011. Here’s why these companies were the strongest performers:

Clean Harbors, Inc. (NYSE:CLH): The company’s shares have returned 52.27% over the past year. The shares recently traded at $63.49 and its market capitalization is $3,366,000,000.  The company is a provider of environmental, energy, and industrial services throughout North America.  The company has benefited from increased attention to environmental remediation and cleanup.

Scoop:  Clean Harbors reached a 52-week high on December 20 at $62.03. In 2011, this company was everywhere helping to clean up: Japan’s earthquake, BP’s oil spill in the Gulf of Mexico, and Brazil’s spill–not to mention routine fracking jobs.

The  company carries a Buy rating by The Street.com for its revenue growth, good cash flow from operations, solid financial position, reasonable debt and a solid stock price performance. One negative note:  Clean Harbors has seen sub par growth in its net income.

Fastenal Company (NASDAQ:FAST): The company’s shares have returned 50.39% over the past year. The shares recently traded at $44.00 and its market capitalization is $13,083,260,000.  The company sells industrial and construction supplies to wholesalers and retailers.  The company has benefited from an increased demand for its products.

Scoop: In Fastenal’s third quarter earnings report, the company’s earnings per share of 0.33 cents came in-line but was perceived as disappointing for its tighter margins; revenues of $726.7 million increased 20.4 percent year over year, beating estimates by $4.75 million and profits jumped 29 percent year over year.

The company’s success was helped by strong sales to manufacturers.

Goodrich Corp. (NYSE:GR): The company’s shares have returned 42.92% over the past year. The shares recently traded at $123.66 and its market capitalization is $15,487,240,000.  The company is a supplier of aerospace components, systems and services to the commercial and general aviation airplane markets.  The company acquired certain of DeCrane Holdings’ operations in September, 2011, and made a number of other acquisitions earlier in the year.  Investors are betting that these acquisitions will pay off with growth in the years ahead.

Scoop:Goodrich’s third quarter earnings report  had earnings per share at $1.70, beating estimates by $0.20 while its $2.03 billion revenue rose 26 percent year over year, also exceeding estimates by $40 million.

On January 3, Goodrich reached a 52-week high at $123.88. The company has a number of strengths including revenue growth, a solid financial position, reasonable debt levels, impressive earnings per share growth, growth in net income and expanding profit margins, according to The Street.com. One area of concern: Goodrich has soft operating cash flow.

HEICO Corp. (NYSE:HEI): The company’s shares have returned 42.56% over the past year. The shares recently traded at $58.46 and its market capitalization is $2,472,790,000.  The company manufactures jet engine and aircraft component replacement parts.  The company’s operating cash flow has increased in each of the past four quarters, as its cash flow from investing and cash flow from financing have decreased.   This indicates that its operations are generating healthy cash flows and its expenses are under control.

Scoop: On December 14, HEICO entered in an agreement for a $670 million revolving credit facility with a banking syndicate consisting of SunTrust Bank (NYSE:STI), Wells Fargo Bank (NYSE:WFC) and Bank of America (NYSE:BAC). The credit facility may be increased to $800 million under certain circumstances, according to a company press release. It replaced the company’s $300 million revolving credit facility.

Two days later, the company’s stock was cut by Aueriga to Hold. Their reasoning? HEICO faces challenging year over year comparisons in 2012 for its Flight Support Group.

Hexcel Corp. (NYSE:HXL): The company’s shares have returned 36.28% over the past year. The shares recently traded at $24.53 and its market capitalization is $2,440,820,000.  The company develops, manufactures and markets composites, including carbon fibers, reinforcement, prepregs, honeycomb, matrix systems, adhesives and composite structures for use in Commercial Aerospace, Space and Defense, and Industrial Applications.  The company’s operating cash flow has increased over the past two quarters, and its non-operating cash flows have decreased.  Investors are betting that these trends continue in 2012.

Scoop: At the end of October, the company reported strong third quarter earnings.  It beat estimates with a 31 percent rise in commercial aerospace unit sales. The company believed the trend would continue into the fourth quarter. It raised its fiscal year 2011 earnings per share guidance to $1.18 – $1.23 from sales of $1.3 billion to  $1.4 billion.

Further Reading: Dow 30 Stocks: 2012 Quarterly Earnings Preview>>

To contact the reporter on this story: Debbie Baratz at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com