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Regal Beloit (RBC) Scales 52-Week High on Organic Growth
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Shares of industrial goods manufacturer Regal Beloit Corporation (RBC - Free Report) hit a 52-week high of $77.50 during yesterday’s trading session. It closed the session a notch lower at $75.50 for a healthy one-year return of 20.3%. Barring minor hiccups, the company’s share price has steadily been on an uptrend since November last year. This Zacks Rank #3 (Hold) stock has the potential for further price appreciation with long-term earnings growth expectations of 11%.
Growth Drivers
Regal Beloit’s long-term growth strategy involves organic growth through innovation of new products, broadening of customer base, exploitation of new opportunities and tactical investments in emerging markets. Over the years, the company consolidated its product lines and streamlined product brands to evolve as a dynamic enterprise.
Regal Beloit outperformed the Zacks categorized Machinery-Electronics industry in the last six months with an average return of 23.4% compared with a gain of 8.9% for the latter. In order to drive continuous improvement, Regal Beloit follows ‘Compass Operating System’ that encompasses a common set of business processes, disciplines and lean Six Sigma tools. Backed by an “open-door” management style, this has helped the company gain a competitive advantage and reach more people in diverse markets around the world.
At the same time, Regal Beloit continues to focus on prudent investment decisions for a disciplined capital allocation, strong and flexible balance sheet position and cash flow enhancement to support dividend growth. Such moves, along with its robust operating platform and an efficient management team help in the execution of its strategic priorities and drive net asset value and dividend growth.
The company’s strong free cash generation is another positive, providing it an opportunity to pursue accretive acquisitions and unlock additional value. Regal Beloit expanded technologically and geographically on the back of its aggressive acquisition policy. Management has further indicated that the company will continue seeking accretive acquisitions as part of its overall growth strategy. Going forward, Regal Beloit remains confident of generating robust operating cash flow to fund its organic and inorganic growth as well as return significant capital to shareholders.
EnerSys has a long-term earnings growth expectation of 9.5%. It topped estimates in each of the trailing four quarters with an average earnings surprise of 4.4%.
Graco has a long-term earnings growth expectation of 10.3%.
Illinois Tool Works has a long-term earnings growth expectation of 7.5%. It topped estimates in each of the trailing four quarters with an average earnings surprise of 2.2%.
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Regal Beloit (RBC) Scales 52-Week High on Organic Growth
Shares of industrial goods manufacturer Regal Beloit Corporation (RBC - Free Report) hit a 52-week high of $77.50 during yesterday’s trading session. It closed the session a notch lower at $75.50 for a healthy one-year return of 20.3%. Barring minor hiccups, the company’s share price has steadily been on an uptrend since November last year. This Zacks Rank #3 (Hold) stock has the potential for further price appreciation with long-term earnings growth expectations of 11%.
Growth Drivers
Regal Beloit’s long-term growth strategy involves organic growth through innovation of new products, broadening of customer base, exploitation of new opportunities and tactical investments in emerging markets. Over the years, the company consolidated its product lines and streamlined product brands to evolve as a dynamic enterprise.
Regal Beloit outperformed the Zacks categorized Machinery-Electronics industry in the last six months with an average return of 23.4% compared with a gain of 8.9% for the latter. In order to drive continuous improvement, Regal Beloit follows ‘Compass Operating System’ that encompasses a common set of business processes, disciplines and lean Six Sigma tools. Backed by an “open-door” management style, this has helped the company gain a competitive advantage and reach more people in diverse markets around the world.
At the same time, Regal Beloit continues to focus on prudent investment decisions for a disciplined capital allocation, strong and flexible balance sheet position and cash flow enhancement to support dividend growth. Such moves, along with its robust operating platform and an efficient management team help in the execution of its strategic priorities and drive net asset value and dividend growth.
The company’s strong free cash generation is another positive, providing it an opportunity to pursue accretive acquisitions and unlock additional value. Regal Beloit expanded technologically and geographically on the back of its aggressive acquisition policy. Management has further indicated that the company will continue seeking accretive acquisitions as part of its overall growth strategy. Going forward, Regal Beloit remains confident of generating robust operating cash flow to fund its organic and inorganic growth as well as return significant capital to shareholders.
Stocks to Consider
Some better-ranked stocks in the industry include EnerSys (ENS - Free Report) , Graco Inc. (GGG - Free Report) and Illinois Tool Works Inc. (ITW - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
EnerSys has a long-term earnings growth expectation of 9.5%. It topped estimates in each of the trailing four quarters with an average earnings surprise of 4.4%.
Graco has a long-term earnings growth expectation of 10.3%.
Illinois Tool Works has a long-term earnings growth expectation of 7.5%. It topped estimates in each of the trailing four quarters with an average earnings surprise of 2.2%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>