Stock Picks: Baker Hughes, Glimcher Realty, WMS Industries

Baker Hughes: Miller Tabak equity analyst Kevin Simpson raised a rating on shares of Baker Hughes (BHI) to buy, from neutral, on Nov. 2, with a price target of $60.

On Nov. 1, Baker Hughes, the world's third-largest oilfield services provider, posted third-quarter profit, excluding some items, of 54¢ a share, exceeding the average analyst estimate by 17 percent, according to Bloomberg data.

In a note, Simpson said he was raising his earnings per share (EPS) estimates to $2.00, from $1.80, for 2010 and to $3.25, from $2.80, for 2011.

"We look for further growth over the next six quarters (excluding a seasonal decline in [the 2011 second quarter]), with onshore growth through 3Q and recovery of deep Gulf activity building as next year progresses," the analyst wrote.

Glimcher Realty Trust: Morgan Joseph reiterated a buy rating on shares of shopping-mall operator Glimcher Realty Trust (GRT) on Nov. 2. A price target on the shares was raised to $9, from $7.50.

In a note, equity analyst Carol Kemple said the company's third-quarter results released on Oct. 28 were in line with her expectations, with funds from operations (FFO) of 16¢ per share, vs. 40¢ per share a year earlier; average shares outstanding were up 88 percent.

"Glimcher has been busy on the acquisition front," Kemple said, noting the company's announcement in August that along with the Blackstone Group, it had entered into an agreement to buy Pearlridge Center in Honolulu, Hawaii's second-largest mall, for $245 million. Kemple also noted that in October, Glimcher completed its purchase of the land for all three phases of a planned development project in Scottsdale, Ariz.

Kemple said management maintained its 2010 FFO guidance range of 72¢ to 77¢ per share; her 2010 FFO per share estimate is 76¢.

WMS Industries: Janney Montgomery Scott equity analyst Brian McGill reiterated a neutral rating and $39 fair value estimate on shares of WMS Industries (WMS) on Nov. 2.

On Nov. 1, WMS, the maker of Monopoly and Wizard of Oz slot machines, reported first-quarter adjusted earnings per share (EPS) of 37¢, topping an average estimate of 36¢ from analysts surveyed by Bloomberg. Revenues were $187.5 million vs. the average estimate of $178.8 million.

The company said it foresees second-quarter revenue in a range of $198 million to $205 million and reaffirmed its view that 2011 revenues will range from $830 million to $850 million.

In a note, McGill said the company's EPS was 3¢ ahead of his estimate. While product sales revenues of $111 million "easily exceeded our expectations," he noted that gross margins were down 420 basis points from a year earlier. (A basis point is one one-hundredth of a percentage point.)

"The company is still executing at a high level," the analyst said. "However, given the challenging replacement environment, lack of growth in the game operations segment, and delays in new markets, we believe the stock is fairly valued."

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