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ABM Industries Hits 52-Week High on Strategic Initiatives
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Shares of the leading facility solutions provider ABM Industries Incorporated (ABM - Free Report) scaled a new 52-week high of $34.13 during Friday’s trading session, before closing a notch lower at $34.02. The undeterred rise in the shares of ABM has continued since January this year, with the company touching newer heights.
Despite its strong price appreciation, this Zacks Rank #3 (Hold) stock still has the wherewithal to further drive its price upward. The stock is currently trading at a forward P/E of 21.7x and has long-term earnings growth expectation of 8%.
Growth Drivers
ABM has embarked on a Vision 2020 Plan that outlines its vision for the next five years. The plan has three primary phases, the first of which is aimed at increasing the efficiency of the company through diligent execution of the operating plan and stringent cost-reduction activities. The second phase will focus on driving growth across the realigned verticals through effective realization of the cost savings from procurement, account management and other organizational changes. The final phase of the transformation will include accelerated growth impetus from the vertical alignment and account planning systems with a continuous focus on additional cost savings. These systematic and strategic plan of actions will likely help ABM to fuel its growth momentum.
Over the years, ABM has developed a platform to deliver an end-to-end service model to its clients by realigning its operational structure into an on-site, mobile and on-demand market based structure. This realignment has improved its long-term growth prospects and provides higher margin opportunities by enabling it to better deliver end-to-end services to its clients across urban, suburban and rural areas. The company further expects to extend its global footprint and strengthen its position in existing markets through both inorganic and organic growth across the industry verticals.
Moving forward, ABM’s strategy entails geographic expansion through strategic acquisitions and organic growth through diligent execution of operations while maintaining desirable profit margins. The company has a healthy pipeline of future businesses with strength particularly seen in its government business. The company expects to improve its profitability in the coming quarters with seamless integration of acquired businesses and newer contracts.
ABM was recently selected as the cleaning services partner for Nationals Park, which is home of Major League Baseball’s Washington Nationals. Under the multi-year agreement, ABM will be responsible for providing day-to-day janitorial services. Lucrative contracts like this not only ensure a steady revenue stream for the company, but also boost investor confidence to catapult the share price to newer 52-week highs.
Other Stocks to Consider
Other stocks that look promising in the industry include Exponent Inc. (EXPO - Free Report) , CBIZ, Inc. (CBZ - Free Report) and CEB Inc. , each carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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ABM Industries Hits 52-Week High on Strategic Initiatives
Shares of the leading facility solutions provider ABM Industries Incorporated (ABM - Free Report) scaled a new 52-week high of $34.13 during Friday’s trading session, before closing a notch lower at $34.02. The undeterred rise in the shares of ABM has continued since January this year, with the company touching newer heights.
Despite its strong price appreciation, this Zacks Rank #3 (Hold) stock still has the wherewithal to further drive its price upward. The stock is currently trading at a forward P/E of 21.7x and has long-term earnings growth expectation of 8%.
Growth Drivers
ABM has embarked on a Vision 2020 Plan that outlines its vision for the next five years. The plan has three primary phases, the first of which is aimed at increasing the efficiency of the company through diligent execution of the operating plan and stringent cost-reduction activities. The second phase will focus on driving growth across the realigned verticals through effective realization of the cost savings from procurement, account management and other organizational changes. The final phase of the transformation will include accelerated growth impetus from the vertical alignment and account planning systems with a continuous focus on additional cost savings. These systematic and strategic plan of actions will likely help ABM to fuel its growth momentum.
Over the years, ABM has developed a platform to deliver an end-to-end service model to its clients by realigning its operational structure into an on-site, mobile and on-demand market based structure. This realignment has improved its long-term growth prospects and provides higher margin opportunities by enabling it to better deliver end-to-end services to its clients across urban, suburban and rural areas. The company further expects to extend its global footprint and strengthen its position in existing markets through both inorganic and organic growth across the industry verticals.
Moving forward, ABM’s strategy entails geographic expansion through strategic acquisitions and organic growth through diligent execution of operations while maintaining desirable profit margins. The company has a healthy pipeline of future businesses with strength particularly seen in its government business. The company expects to improve its profitability in the coming quarters with seamless integration of acquired businesses and newer contracts.
ABM was recently selected as the cleaning services partner for Nationals Park, which is home of Major League Baseball’s Washington Nationals. Under the multi-year agreement, ABM will be responsible for providing day-to-day janitorial services. Lucrative contracts like this not only ensure a steady revenue stream for the company, but also boost investor confidence to catapult the share price to newer 52-week highs.
Other Stocks to Consider
Other stocks that look promising in the industry include Exponent Inc. (EXPO - Free Report) , CBIZ, Inc. (CBZ - Free Report) and CEB Inc. , each carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>