What happened

Shares of manufacturer Nordson Corporation (NASDAQ:NDSN) rose 17.1% in May, according to data provided by S&P Global Market Intelligence. That handily beat the S&P 500's 4.5% gain. For the year to date, Nordson's shares are up 23.4%, compared to a flat S&P 500. 

So what

Nordson manufactures dispensing equipment for industrial adhesives, coatings, and sealants. It's a very specific niche market, although it does serve a wide variety of industries, including automotive, electronics, aerospace, and healthcare. The company is undergoing quite a bit of change: New CEO Sundaram Nagarajan took the reins Aug. 1, incoming CFO Joseph P. Kelley will succeed current CFO Gregory Thaxton on July 6, and the company announced a "strategic business realignment" on March 30. 

Metal rectangles of different colors fanned out like a hand of cards

Image source: Getty Images.

With all of that going on, and the COVID-19 crisis on top of it, the market was expecting a substantial deterioration in Q2 FY2020 earnings when Nordson announced them on May 20. Instead, adjusted earnings per share rose by 2.6% over the prior-year quarter to $1.58/share, handily beating the analysts' consensus of $1.28/share. The stock popped in response.

Now what

Because it's a leader in its niche and has done such a good job of diversifying its customer base, Nordson has been a reliable outperformer over the past 10 years. However, with the pandemic disrupting manufacturing and numerous other industries that the company serves, Nordson may underperform in the near term. That makes its all-time-high valuation of 34.4 times earnings seem a bit pricey. Investors may want to keep this one on their watch list for now.