Too Quick On The Trigger?

On Wall Street, 2 cents could cost a stock a lot. That was Trinova's (TNV) unfortunate lesson when it reported fourth-quarter earnings of 62 cents a share in late January. That 62 cents profit was just a bit below the 64 cents mean estimate that 10 analysts had expected. Wham! Trinova's stock fell 13%, to 25 a share that day. And analysts quickly pulled the plug on Trinova by downgrading the stock and cutting their 1995 earnings estimates. But some bold pros are snapping up shares, now trading at 26.

What's the deal? One New York investment strategist believes a major diversified industrial company wants to buy Trinova, a worldwide maker of a range of industrial engineered components such as pressure hoses and fittings, adapters, and self-sealing couplings. Other products include electronic and pneumatic control devices, and fuel-line components.

One analyst calculates that Trinova is well worth 35 a share in a takeover. The company interested in Trinova is big in aerospace and automotive products--two areas where Trinova derives the bulk of its earnings. Trinova's aerospace and defense-related products generate 28% of profits and 20% of sales. Automotive products, such as body moldings and window frames, account for 52% of earnings and 27% of revenues. Industrial products make up 53% of revenues and 20% of earnings. Trinova posted total revenues of $1.8 billion last year. Trinova declined comment.

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