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What: Shares of Sauer-Danfoss
So what: Fueled by a 54% spike in revenue, Sauer-Danfoss swung to a fourth-quarter profit of $126.02 million, or $2.60 per share, compared to a loss of $74.73 million, or $1.55 per share, in the year-ago period. The company has been benefitting from rebounding demand in all three of its regions, with sales increasing 53% in the Americas, 42% in Europe, and doubling in Asia-Pacific.
Now what: Don't let today's massive rally scare you away from Sauer-Danfoss. Thanks to surging orders and backlogs, the company now sees full-year earnings of $3-$4 per share on top-line growth of 10%-20%. The stock might be surging today, but when you consider that it's still trading at a forward P/E of less than 11(using the midpoint of management's profit guidance), Sauer-Danfoss still seems like a reasonable opportunity.
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