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Barnes (B) to Gain From Strong Gimatic Business, Headwinds Persist
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On Jan 7, we issued an updated research report on Barnes Group, Inc. (B - Free Report) .
In the past six months, this Zacks Rank #3 (Hold) stock has returned 40.7% compared with the industry’s growth of 30.1%.
Present Scenario
Barnes Group has been experiencing consistent strength in its Gimatic business. Notably, Gimatic’s patented technologies and intellectual property-based solutions have enhanced the company’s portfolio of robotic technology solutions in the industrial automation market. The business is poised to benefit from the rising adoption of robotic technologies in end markets. Also, the company’s focus on investing in product innovation, coupled with its commercial and operational excellence initiatives, will likely act as tailwind in the quarters ahead.
Moreover, the company focuses on rewarding shareholders through dividend payouts and share buybacks. For instance, in the first nine months of 2020, the company returned $39.9 million of cash to shareholders through dividend payouts and share buybacks. Exiting the third quarter of 2020, it possessed the authorization to repurchase 3.7 million worth of common stock under its existing stock repurchase authorization program. However, for the time being, due to the uncertain economic environment caused by the coronavirus pandemic, it has suspended share repurchase activity.
However, the company has been experiencing softness in automotive and industrial end markets. In the third quarter, its Industrial segment’s sales declined 15% on a year-over-year basis, owing to low order intakes, caused mostly by the coronavirus outbreak-led issues. Also, reduced aircraft utilization and lower demand for its manufactured components in the aerospace end market are likely to affect its Aerospace segment’s performance in the quarters ahead.
Further, the company has been dealing with rising cost of sales. Notably, in the third quarter, its total operating costs and expenses (including cost of sales and selling, general and administrative expenses) were $237.8 million, reflecting an increase of 5.5% on a sequential basis. If unchecked, higher costs and operating expenses might continue to affect its margins and profitability in the quarters ahead.
Kaman delivered a positive earnings surprise of 43.61%, on average, in the trailing four quarters.
Graco delivered a positive earnings surprise of 21.74%, on average, in the trailing four quarters.
Dover delivered a positive earnings surprise of 18.10%, on average, in the trailing four quarters.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Barnes (B) to Gain From Strong Gimatic Business, Headwinds Persist
On Jan 7, we issued an updated research report on Barnes Group, Inc. (B - Free Report) .
In the past six months, this Zacks Rank #3 (Hold) stock has returned 40.7% compared with the industry’s growth of 30.1%.
Present Scenario
Barnes Group has been experiencing consistent strength in its Gimatic business. Notably, Gimatic’s patented technologies and intellectual property-based solutions have enhanced the company’s portfolio of robotic technology solutions in the industrial automation market. The business is poised to benefit from the rising adoption of robotic technologies in end markets. Also, the company’s focus on investing in product innovation, coupled with its commercial and operational excellence initiatives, will likely act as tailwind in the quarters ahead.
Moreover, the company focuses on rewarding shareholders through dividend payouts and share buybacks. For instance, in the first nine months of 2020, the company returned $39.9 million of cash to shareholders through dividend payouts and share buybacks. Exiting the third quarter of 2020, it possessed the authorization to repurchase 3.7 million worth of common stock under its existing stock repurchase authorization program. However, for the time being, due to the uncertain economic environment caused by the coronavirus pandemic, it has suspended share repurchase activity.
However, the company has been experiencing softness in automotive and industrial end markets. In the third quarter, its Industrial segment’s sales declined 15% on a year-over-year basis, owing to low order intakes, caused mostly by the coronavirus outbreak-led issues. Also, reduced aircraft utilization and lower demand for its manufactured components in the aerospace end market are likely to affect its Aerospace segment’s performance in the quarters ahead.
Further, the company has been dealing with rising cost of sales. Notably, in the third quarter, its total operating costs and expenses (including cost of sales and selling, general and administrative expenses) were $237.8 million, reflecting an increase of 5.5% on a sequential basis. If unchecked, higher costs and operating expenses might continue to affect its margins and profitability in the quarters ahead.
Stocks to Consider
Some better-ranked companies from the same space are Kaman Corporation (KAMN - Free Report) , Graco Inc. (GGG - Free Report) and Dover Corporation (DOV - Free Report) . While Kaman currently sports a Zacks Rank #1 (Strong Buy), Graco and Dover carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kaman delivered a positive earnings surprise of 43.61%, on average, in the trailing four quarters.
Graco delivered a positive earnings surprise of 21.74%, on average, in the trailing four quarters.
Dover delivered a positive earnings surprise of 18.10%, on average, in the trailing four quarters.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>