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Astec Industries (ASTE) Hits 52-Week High on Strong Orders
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Shares of Astec Industries, Inc. (ASTE - Free Report) reached a new 52-week high of $54.24 on Jun 3 before closing a little lower at $53.86. The stock price appreciation came on the back of expectation of strong 2016 results based on sound backlog and new orders.
This Chattanooga, TN-based manufacturer of building, paving and mining equipment has a market cap of $1.24 billion. Average volume of shares traded over the last three months is approximately 146K. Astec has delivered a year-to-date return of around 32.33%.
Growth Drivers
Astec’s shares have been rising since the company posted upbeat first-quarter 2016 results despite headwinds posed by lower oil and natural gas prices, the global mining slowdown and a strong U.S. dollar. The company was able to secure and ship orders, mainly due to the passage of the federal highway bill in the U.S. The company reported earnings of 77 cents per share in the quarter, which marked a year-over-year increase of around 18.5%.
Backlog jumped 48.7% year over year to $432.8 million as of Mar 31, 2016 mainly driven by its domestic backlog, which recorded a substantial 90.3% year-over-year improvement. This is primarily attributable to the passage of a new Federal highway bill, ongoing strong private market activity and the $122.5 million pellet plant order. The company also received the remainder of the contracted payment on the first $30 million order. Astec had previously announced the receipt of the initial $30 million order on Aug 20, 2015 to build, deliver and install the first production line of a new turnkey wood pellet production facility. The company plans to build and deliver the equipment in the additional order during 2016.
Astec believes that results in the second quarter will remain unchanged sequentially. Astec stated that revenue outlook for the balance of 2016 remains up 5% versus last year with expectations of improved bottom-line performance. Orders have been strong in the infrastructure group since early December last year, mainly due to the highway bill and the pellet plant, which will aid the company’s performance.
Moreover, Astec will benefit from acquisitions and the launch of new products. Extension of the long-term highway bill, further opportunity from pellet plants and strong infrastructure sales activity will also drive growth.
Astec currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the sector include ACCO Brands Corporation (ACCO - Free Report) , General Cable Corporation (BGC - Free Report) and Brady Corp. (BRC - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).
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Astec Industries (ASTE) Hits 52-Week High on Strong Orders
Shares of Astec Industries, Inc. (ASTE - Free Report) reached a new 52-week high of $54.24 on Jun 3 before closing a little lower at $53.86. The stock price appreciation came on the back of expectation of strong 2016 results based on sound backlog and new orders.
This Chattanooga, TN-based manufacturer of building, paving and mining equipment has a market cap of $1.24 billion. Average volume of shares traded over the last three months is approximately 146K. Astec has delivered a year-to-date return of around 32.33%.
Growth Drivers
Astec’s shares have been rising since the company posted upbeat first-quarter 2016 results despite headwinds posed by lower oil and natural gas prices, the global mining slowdown and a strong U.S. dollar. The company was able to secure and ship orders, mainly due to the passage of the federal highway bill in the U.S. The company reported earnings of 77 cents per share in the quarter, which marked a year-over-year increase of around 18.5%.
Backlog jumped 48.7% year over year to $432.8 million as of Mar 31, 2016 mainly driven by its domestic backlog, which recorded a substantial 90.3% year-over-year improvement. This is primarily attributable to the passage of a new Federal highway bill, ongoing strong private market activity and the $122.5 million pellet plant order. The company also received the remainder of the contracted payment on the first $30 million order. Astec had previously announced the receipt of the initial $30 million order on Aug 20, 2015 to build, deliver and install the first production line of a new turnkey wood pellet production facility. The company plans to build and deliver the equipment in the additional order during 2016.
Astec believes that results in the second quarter will remain unchanged sequentially. Astec stated that revenue outlook for the balance of 2016 remains up 5% versus last year with expectations of improved bottom-line performance. Orders have been strong in the infrastructure group since early December last year, mainly due to the highway bill and the pellet plant, which will aid the company’s performance.
Moreover, Astec will benefit from acquisitions and the launch of new products. Extension of the long-term highway bill, further opportunity from pellet plants and strong infrastructure sales activity will also drive growth.
Astec currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the sector include ACCO Brands Corporation (ACCO - Free Report) , General Cable Corporation (BGC - Free Report) and Brady Corp. (BRC - Free Report) . All these stocks sport a Zacks Rank #1 (Strong 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 >>