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Altra Industrial Well Poised for Near and Long-Term Growth
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We issued an updated research report on Altra Industrial Motion Corporation on Jul 7. The company boasts strong growth prospects in the near and long term, making it a good investment choice for investors seeking exposure in the machinery industry.
In the last one year, Altra Industrial’s shares have yielded a return of 38.08%, outperforming the gain of 35.17% recorded by the Zacks categorized Machinery industry. We believe that impressive financial performance in the past few quarters supported the share price rally. The company delivered a positive earnings surprise of 32.50% in first-quarter 2017. It pulled off an average positive earnings surprise of 15.93% in the last four quarters.
One of the major strengths of Altra Industrial is its diversified product portfolio and large customer base in various end markets including energy, general industrial, material handling, metals, mining, special machinery, transportation and turf & garden industries. In 2017, the company anticipates benefiting from its improving end markets and thus has revised its revenue forecast for the year to $840–$855 million from the previous projection of $835–$855 million.
Also, acquiring assets remain Altra Industrial’s one of the preferred modes for enhancing profitability. Notably, Stromag business – known for its tailored-engineered solution for customers in various markets – contributed 19.2% to sales growth in first-quarter 2017. The assets were acquired in Jan 2017. The company anticipates Stromag to be earnings accretive in 2017.
To improve its margin profile, Altra Industrial has been working on certain restructuring and cost-saving strategies. It intends to lower the number of its facilities by 20−30%, as well as improve its supply chain worldwide. These initiatives will be completed by 2018. As part of these restructuring activities, the company completed two facility consolidations in first-quarter 2017, with consolidated facilities totaling eight since the inception of the program. It anticipates closing one more facility by the end of the year. Total savings anticipated from these activities will likely exceed $7 million.
For 2017, Altra Industrial raised its non-GAAP earnings guidance for 2017 to $1.83–$1.93 per share from the earlier forecast of $1.75–$1.85. Over the long term, the company anticipates revenue growth to be in excess of the Gross Domestic Product while aims to improve its operating margin by 50 basis points.
We believe that the above-mentioned positives clearly justify Altra Industrial’s Zacks Rank #2 (Buy). Also, the stock’s Zacks Consensus Estimate represents year-over-year growth of 23.3% for 2017 and 12.0% for 2018.
In the machinery space, other stocks worth considering include Sun Hydraulics Corporation , Colfax Corporation and Barnes Group, Inc. (B - Free Report) . While Sun Hydraulics sports a Zacks Rank #1 (Strong Buy), both Colfax and Barnes Group carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sun Hydraulics delivered a positive earnings surprise of 5.56% in the last quarter. Also, the stock’s earnings estimates for 2017 and 2018 have been revised upward over the past 60 days.
Colfax Corporation pulled of an average positive earnings surprise of 9.45% for the last four quarters. Also, earnings expectations for 2017 and 2018 improved over the past 60 days.
Barnes Group’s financial performance was impressive in the last four quarters, with an average positive earnings surprise of 8.94%. Also, its earnings estimate represents year-over-year growth of 10.0% for 2017 and 8.3% for 2018.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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Altra Industrial Well Poised for Near and Long-Term Growth
We issued an updated research report on Altra Industrial Motion Corporation on Jul 7. The company boasts strong growth prospects in the near and long term, making it a good investment choice for investors seeking exposure in the machinery industry.
In the last one year, Altra Industrial’s shares have yielded a return of 38.08%, outperforming the gain of 35.17% recorded by the Zacks categorized Machinery industry. We believe that impressive financial performance in the past few quarters supported the share price rally. The company delivered a positive earnings surprise of 32.50% in first-quarter 2017. It pulled off an average positive earnings surprise of 15.93% in the last four quarters.
One of the major strengths of Altra Industrial is its diversified product portfolio and large customer base in various end markets including energy, general industrial, material handling, metals, mining, special machinery, transportation and turf & garden industries. In 2017, the company anticipates benefiting from its improving end markets and thus has revised its revenue forecast for the year to $840–$855 million from the previous projection of $835–$855 million.
Also, acquiring assets remain Altra Industrial’s one of the preferred modes for enhancing profitability. Notably, Stromag business – known for its tailored-engineered solution for customers in various markets – contributed 19.2% to sales growth in first-quarter 2017. The assets were acquired in Jan 2017. The company anticipates Stromag to be earnings accretive in 2017.
To improve its margin profile, Altra Industrial has been working on certain restructuring and cost-saving strategies. It intends to lower the number of its facilities by 20−30%, as well as improve its supply chain worldwide. These initiatives will be completed by 2018. As part of these restructuring activities, the company completed two facility consolidations in first-quarter 2017, with consolidated facilities totaling eight since the inception of the program. It anticipates closing one more facility by the end of the year. Total savings anticipated from these activities will likely exceed $7 million.
For 2017, Altra Industrial raised its non-GAAP earnings guidance for 2017 to $1.83–$1.93 per share from the earlier forecast of $1.75–$1.85. Over the long term, the company anticipates revenue growth to be in excess of the Gross Domestic Product while aims to improve its operating margin by 50 basis points.
We believe that the above-mentioned positives clearly justify Altra Industrial’s Zacks Rank #2 (Buy). Also, the stock’s Zacks Consensus Estimate represents year-over-year growth of 23.3% for 2017 and 12.0% for 2018.
In the machinery space, other stocks worth considering include Sun Hydraulics Corporation , Colfax Corporation and Barnes Group, Inc. (B - Free Report) . While Sun Hydraulics sports a Zacks Rank #1 (Strong Buy), both Colfax and Barnes Group carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sun Hydraulics delivered a positive earnings surprise of 5.56% in the last quarter. Also, the stock’s earnings estimates for 2017 and 2018 have been revised upward over the past 60 days.
Colfax Corporation pulled of an average positive earnings surprise of 9.45% for the last four quarters. Also, earnings expectations for 2017 and 2018 improved over the past 60 days.
Barnes Group’s financial performance was impressive in the last four quarters, with an average positive earnings surprise of 8.94%. Also, its earnings estimate represents year-over-year growth of 10.0% for 2017 and 8.3% for 2018.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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