NN, Inc. (NASDAQ:NNBR) Stays a Couple of Cents Before the Breakout
02 Sep 2010

Since the latest quarter report of NN, Inc. (NASDAQ:NNBR) confirmed that the company is recovering and turning back to profitability, their stock is flying high. Yesterday, only 2 more cents were needed for NNBR to break the 52-week top.

On over 482,000 shares traded yesterday, NNBR stock closed the market at $8.35 and with the daily high of $8.40 got really close to its upper trading range and even closer to the yearly high at $8.42. As the possible breakout has been alerted to investors yesterday evening, it may happen during today’s trading session and NNBR seems to have great chances to report a brand new highest value for the past year.

From a fundamental point of view, the latest financial results have been quite encouraging for investors and since their announcement NNBR has become one of the top NASDAQ gainers, with a following analyst upgrade to a “buy” recommendation.

During the first half of this year the company has returned back to its historical profitability range, due mostly to increased demand and much better control over the fixed and variable costs. As several production facilities have been closed over the past two years, NNBR has now managed to optimize the structure of its operations. Though, some uncertainty still arises from the capital structure, which does not look so optimal yet.

NNBR seems much more leveraged than its peers with its almost $80 million in long-term debt and some further fluctuations in the interest rates may in the future affect the earnings. This looks already reflected in the stock’s risk, which seems considerably more volatile than the stock of similar companies with beta of 2.78 as compared to an industry average of 1.18.

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