ITT Corporation (ITT) Upgraded $ 21.42

ITT Corporation (ITT) is a world-renowned name. Based in the U.S., in White Plains, NY, to be specific, this is a highly diversified company with an active presence and activity in defense and security, water and fluid management, and motion and flow control. The current company that we see and know was founded in 1996 under the name ITT Industries Inc. as a spin-off of the original ITT Corporation, and then it changed its name back to ITT Corporation in 2006.

This company belongs to the diversified machinery industry and has 40,000 full-time employees. ITT Corporation has been lauded for its socioeconomic and environmental performance by being named 10 times to the Dow Jones Sustainability World Index. Since it was started in 1999, this company has been named to the list every year, one of the few companies with that distinction.

With shares priced at around $21, the price is precariously close to the low point of the 52-week range of $16.67-$122.42. The average share volume for three months has been 1,994,700. ITT Corporation has a market capitalization of $2.03 billion. The earnings per share is $6.87 and the P/E ratio is low enough for value investors at 3.18. It does yield a dividend of 1.7%.

Its competitor, Dana Holding Corporation (DAN), has a market capitalization of $2.11 billion, with a year-on-year quarterly revenue growth of 28.8% versus ITT’s of 12.8%. Five-year price/earnings to growth is .33 for Dana and 1.33 for ITT Corporation. ITT’s figures for quarterly revenue growth, though low compared with Dana, are in keeping with that of the industry as a whole, which is 11.9%, so that is a positive point.

Some permutations and combinations have been taking place at ITT Corporation. In 2011, by spinning off its defense businesses, the company Exelis was born, and Xylem was given birth to by spinning off its water technology business.

ITT was named a "buy" when the spin-off took place in December 2011. This is because spin-offs are consistently undervalued by the market, so it was considered a good time to buy, with a P/E ratio of 4, $2 billion market cap and $6 billion revenue.

In terms of the profitability of this company, its profit margin is 5.42% and operating margin is 11.67%. As management effectiveness indicators, its return on equity is quite good at 14.86% and return on assets is 6.25%. That is above the asset-heavy mark but still a bit low.

On Dec. 14, 2011, it was reported that ITT Corporation had elected Orlando Ashford to its board of directors, a man with extensive global and human resource leadership experience with a glowing resume — surely another asset to the company.

We have seen ITT’s quarterly revenue growth rate. Its quarterly earnings growth year-on-year is -46.2%. Not very uplifting, and this company needs to do something to get a handle on its expenses. Its debt-equity ratio is high as well at 74.75, $3.17 billion being total debt of the most recent quarter. Its current ratio of the same period is 1.57.

The company’s growth for the year is expected to be -82.2%. This is projected as improving in 2013 and set at 11.5%. The per annum growth for the next five years is to be 10.5% per annum, higher than the annual growth of the past five years of 7.74%. Its selling and distribution expenses are quite high

http://www.gurufocus.com/news/158934/itt-corp-why-now-is-a-good-time-to-buy

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