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Industrial goods manufacturer, Ingersoll-Rand Plc (IR - Analyst Report) reached a new 52-week high of $71.22 on Nov 27. Its share prices have been trending up since the announcement of solid third-quarter 2013 results on Oct 18.

Growth Drivers

Ingersoll delivered solid third-quarter 2013 results beating the Zacks Consensus Estimate on both revenues and earnings. Adjusted earnings per share from continuing operations stood at $1.16, exceeding the Zacks Consensus Estimate by 7.4%. Moreover, both revenues and earnings grew year over year.

All the four segments of the company namely: Climate Solutions, The Industrial Technologies, Residential Solutions and The Security Technologies, reported year-over-year growth in revenues.

Furthermore, the company recently announced that it is spinning off its commercial and residential security businesses into a separate standalone company. Ingersoll will not have any stake in this new company, which has been named Allegion plc.

The spin-off is expected to unlock value for the company’s shareholders. The changes made will enable Ingersoll to strengthen its focus on core businesses. The restructuring initiative is aimed at focusing on growth, implementation of business operating system and reducing complexity and overhead cost, to facilitate long-term growth and improve margin.

Ingersoll has a strong base in major markets including air conditioning systems and services (Trane), transport refrigeration (Thermo King), door hardware (Schlage) and industrial technologies (Club Car). A foothold on these markets, together with its solid foundation of global brands, has enabled the company to outperform even in this competitive environment.

Other Stocks to Consider

Ingersoll currently has a Zacks Rank #3 (Hold). Other better-ranked stocks that look promising include Xylem Inc. (XYL - Analyst Report), Flowserve Corp. (FLS - Analyst Report) and DXP Enterprises, Inc. (DXPE - Snapshot Report). While Flowserve and DXP Enterprise each carry a Zacks Rank #2 (Buy), Xylem has a Zacks Rank #1 (Strong Buy).

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