Ingersoll-Rand: "A Snappy Play"

By Gene G. Marcial

With the economy expected to rev up in 2005, some investors are turning to Ingersoll-Rand (IR ), a heavy manufacturer. "Ingersoll is no longer seen as a boring industrial company. It's a snappy play on the improving economy," says Lewis Rabinowitz, vice-president/portfolio manager at C.E. Unterberg, Towbin, which has bought shares. IR has risen from 62 in August to 75.73 on Dec. 8.

Rabinowitz says IR's products -- including the Bobcat skid steer loader and Thermo King refrigeration for trucks -- position it to profit from a rebound. Rabinowitz figures Ingersoll will earn $4.95 a share in 2004, $6 in 2005, and $7.10 in 2006. His 12-month price target: 90. With its cash from selling assets in the past two years, IR aims to buy back 10 million shares. Also, analysts expect Ingersoll to buy CISA, an Italian lockmaker with 10 factories worldwide. It already owns 30%. The rest is valued at $240 million, plus debt of $200 million. Andrew Casey of Prudential Equity Group, who tags IR "overweight," says CISA will lift 2005 earnings by 8 cents to 10 cents a share.

Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

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