(December 21, 2010)

RBC Bearings, Inc. (ROLL) recently hit a new multi-year high after reporting strong Q2 results in early November that included its third consecutive earnings surprise. Estimates have since jumped higher, with the next-year estimate projecting 23% growth, helping to eliminate upward resistance for this Zacks #1 rank stock.

Company Description:
RBC Bearings, Inc. manufactures and sells precision plain, roller and ball bearings worldwide and has a market cap of $828 million.

Industrial companies have been strong in the global economic rebound as demand has returned to their end markets. That dynamic lifted RBC to strong Q2 results from early November that came in ahead of expectations.

Second-Quarter Results:
Revenue for the period was up 31% from last year to $64 million. Earnings also came in strong at 41 cents, 5% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 8% over the last three quarters.

The company's solid Q2 results were also helped by cost and expense management, with gross margin expanding 210 Bps and operating margin increasing 420 Bps.

Strong Financial Profile:
RBC also continues to focus on its balance sheet, with cash and equivalents of $39 million and just $31 million in debt for a debt-to-equity ratio of just.2%, well below the industry average of 17.3%.

Estimates:
We saw a little bit of movement in estimates off the good quarter, with the current year adding 5 cents to $1.72 while the next-year estimate gained 12 cents to $2.11, a bullish 23% growth projection.

Valuation:
But in spite of the gains, RBC still has value, trading with a PEG ratio of .96%, below the traditional benchmark for value of 1.

2-Year Chart:
On the chart, RBC has been strong for the last year, recently jumping higher to a new multi-year high at $38.96 on the good quarter. But in spite of the gains, the stochastic below the chart is signaling that shares are trading safely away from over-bought territory. Look for support from the trend line on any weakness, take a look below.



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