PowerRatings Stock Spotlight: The Toro Company

Landscaping and lawn care are far from the minds of homeowners in the depth of the North Eastern USA winter season. However, in many parts of the country and world, the grass never stops growing, requiring hands on maintenance on a regular basis.

I have not so fond, early teen memories of pushing my grandfathers little green Lawn-Boy mower on his several acres of suburban grass in the sweltering heat. Besides earning less than minimum wage, the mower wasn't self propelled making the task all the more onerous. I recall that beat up, old fashion 1960's looking mower did have several impressive traits.

First, it would start easily every time; one pull on the ripcord was usually all it took, even after sitting all winter in the garage shed. Secondly, the machine was built like a tank. Hitting stumps and other assorted abuse over many years didn't stop the little Lawn-Boy from doing its job.

This quality product was my first exposure to this week's PowerRated Stock Spotlight Company, Toro (TTC | Quote | Chart | News | PowerRating). Toro is the worldwide leading maker of equipment for lawn care and irrigation. They manufacturer well known brands such as Lawn-Boy, Hayter, Lawn Genie, Toro, Exmark, and Pope. Toro's business presently consists of about 68% professional irrigation/lawn care products and 30% residential/home owner equipment. The company has earned a 4 Long Term PowerRating, recently being upgraded from a 3 rank.

Our Long Term PowerRating is a stock rating system that ranks stocks on a scale from 1 to 10 based on the likelihood of  price being higher one year in the future. 10 rated stocks have an 81% chance of trading higher one year later, 9 rated stocks have a 79.1% chance and so on down the scale. These ratings are based on 13 years of statistically valid studies of 1000's of trades across most market conditions.

Toro was launched in 1914 and has grown to become the worldwide leader in lawn care equipment. They currently have a presence in 140 countries with total sales of over $1.9 billion dollars. They recently announced full fiscal 2008 results.

Earnings Per Share was $3.10, International Sales gained 12% and they posted record operating cash flow. Domestic U.S. sales were down, but this was more than offset by strong international sales. In fact, residential sales dipped by over 19% due to the weakening of the American economy in 2008.

Technically, price has been in a strong uptrend since November 24th 2008 but the price advance was stopped cold by the 200-day SMA earlier in January. Shares are currently sitting above the 50-day SMA but below the 200-day SMA at around $32.00.

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David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.