The electric share price ascent at Bodycote(LSE: BOY) received a further shot in the arm in late February, as signs of progress in its key markets sent investors into something of a frenzy.
The engineer has now added 29% in value since the start of 2016, and I believe it has what it takes to surpass April's all-time tops of 836.5p per share.
At first glance Bodycote's full-year release in February may not have appeared much to shout about. While revenues rose 5.9% to £600.6m, the thermal processor manufacturer saw like-for-like sales slump 3.5%.
Still, stock pickers cheered news that "excluding energy, revenues at constant exchange rates were flat, with momentum building throughout the year." Revenues at constant currencies were actually 6% lower at the mid-year point, illustrating Bodycote's robust sales improvement more recently.
At its aviation operations, the engineer noted that "civil aerospace in Western Europe was strong [in 2016], particularly in the second half," and it advised that it expects "continued modest growth" from its commercial division in 2017.
Not only does the prospect of rising civil build rates bode well for Bodycote's aerospace operations, but President Trump's desire to rebuild the US military could provide its defence arm a huge dose of rocket fuel too.
Meanwhile, a resolute auto market also provides Bodycote with strong sales opportunities. The firm saw car and light truck revenues growth double to 6% in the second half of 2016 from 3% in the prior six months, thanks to a strong global market and new contract successes.
So while uncertainty surrounding the oil and gas markets could remain a headache for Bodycote's energy operations (the firm expects "no near-term improvement in the oil & gas sector"), I believe the structural opportunities afforded by its other core markets, allied with ongoing efforts to improve its business mix, should deliver strong earnings growth.
The City expects Bodycote to generate bottom-line expansion of 11% and 7% in 2017 and 2018 alone. So while looking slightly toppy on paper, I reckon a forward P/E ratio of 22.1 times is fair value given the engineer's robust long-term outlook.
A delicious pick
Investors have also been piling into Hilton Food Group(LSE: HFG) with gusto over recent weeks, the stock gaining 15% during the past month alone and hitting new record tops around 750p in the process.
Hilton was buoyed by a positive reaction to late March's full-year financials, with a strong performance in the UK driving volumes and like-for-like revenues 7.4% and 7.2% higher respectively in 2016. And the business has also been a beneficiary of heavy sterling weakness over the past year (at actual currencies sales rose 12.8% last year).
With the City expecting revenues to keep on rising, Hilton's hot growth story is anticipated to continue with bottom-line expansion of 7% and 6% in 2017 and 2018.
Such forecasts result in a high prospective P/E multiple of 20.3 times. But I believe the huge investment Hilton is making to expand its international footprint should help deliver meaty earnings expansion and help it merit such a premium. For instance, work is due to start later this year on its most expensive investment to date, the colossal Queensland facility.
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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Bodycote. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.