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IDEX (IEX) Hits 52-Week High on Holistic Growth Impetus
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Shares of industrial goods manufacturer IDEX Corporation (IEX - Free Report) scaled a 52-week high of $91.56 on Aug 8, before closing the trading session a notch lower at $91.55 for a healthy year-to-date return of 19.5%. Barring minor hiccups, IDEX’s share prices have steadily been on an uptrend since July this year.
Despite its strong price appreciation, this Zacks Rank #3 (Hold) stock has the wherewithal to continue its growth curve. The stock is currently trading at a forward P/E of 24.4x and has long-term earnings growth expectation of 13%.
Growth Drivers
Despite a challenging macroeconomic environment, IDEX reported solid second-quarter 2016 results with a healthy year-over-year increase in earnings. GAAP earnings for the reported quarter were $75.8 million or 99 cents per share compared with $69.6 million or 89 cents per share in the year-ago quarter due to a significant improvement in revenues. Reported earnings comfortably beat the Zacks Consensus Estimate by 6 cents.
Net sales in second-quarter 2016 were $549.7 million compared with $514.9 million in the year-earlier quarter, primarily due to improved performances from Water, Scientific Fluidics and Dispensing businesses.
Moving forward, IDEX intends to spread out its businesses in the emerging markets by focusing on organic growth. The company aims to increase its market exposure and improve sales mix by continually developing new products. With a flexible yet disciplined focus on cost and productivity, it intends to optimize the cost structure, increase its competitiveness and reallocate resources to improve profitability.
The company is striving to counter the muted growth environment by improving productivity and conducting heavy restructuring initiatives across its portfolio. At the same time, IDEX aims to exploit opportune acquisition opportunities to fuel its inorganic growth momentum. These acquisitions expand its geographic reach, fill technology gaps and strengthen its foothold in the existing markets while expanding its product lines.
The company recently inked a definitive agreement to acquire SFC KOENIG AG, a global leader in the manufacturing of metal–to–metal seal and flow control solutions serving a variety of industries, for €217 million. SFC KOENIG produces highly engineered expanders and check valves for critical applications across the transportation, hydraulic, aviation and medical markets. This deal will augment IDEX’s position in the highly-engineered sealing solutions space.
Last month, LUKAS Hydraulik GmbH, a subsidiary of IDEX, completed the acquisition of AWG Fittings GmbH in a €46.0 million cash-free, debt-free transaction. AWG is one of the leading manufacturers of mobile and stationary fire protection systems in the world. The acquisition is expected to boost the company’s Fire Suppression platform with its highly integrated firefighting technology and equipment.
Other Stocks to Consider
Some better-ranked stocks in the industry include Illinois Tool Works Inc. (ITW - Free Report) , Luxfer Holdings PLC (LXFR - Free Report) and Metso Corporation , each carrying a Zacks Rank #2 (Buy).
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IDEX (IEX) Hits 52-Week High on Holistic Growth Impetus
Shares of industrial goods manufacturer IDEX Corporation (IEX - Free Report) scaled a 52-week high of $91.56 on Aug 8, before closing the trading session a notch lower at $91.55 for a healthy year-to-date return of 19.5%. Barring minor hiccups, IDEX’s share prices have steadily been on an uptrend since July this year.
Despite its strong price appreciation, this Zacks Rank #3 (Hold) stock has the wherewithal to continue its growth curve. The stock is currently trading at a forward P/E of 24.4x and has long-term earnings growth expectation of 13%.
Growth Drivers
Despite a challenging macroeconomic environment, IDEX reported solid second-quarter 2016 results with a healthy year-over-year increase in earnings. GAAP earnings for the reported quarter were $75.8 million or 99 cents per share compared with $69.6 million or 89 cents per share in the year-ago quarter due to a significant improvement in revenues. Reported earnings comfortably beat the Zacks Consensus Estimate by 6 cents.
Net sales in second-quarter 2016 were $549.7 million compared with $514.9 million in the year-earlier quarter, primarily due to improved performances from Water, Scientific Fluidics and Dispensing businesses.
IDEX CORP Price and Consensus
IDEX CORP Price and Consensus | IDEX CORP Quote
Moving forward, IDEX intends to spread out its businesses in the emerging markets by focusing on organic growth. The company aims to increase its market exposure and improve sales mix by continually developing new products. With a flexible yet disciplined focus on cost and productivity, it intends to optimize the cost structure, increase its competitiveness and reallocate resources to improve profitability.
The company is striving to counter the muted growth environment by improving productivity and conducting heavy restructuring initiatives across its portfolio. At the same time, IDEX aims to exploit opportune acquisition opportunities to fuel its inorganic growth momentum. These acquisitions expand its geographic reach, fill technology gaps and strengthen its foothold in the existing markets while expanding its product lines.
The company recently inked a definitive agreement to acquire SFC KOENIG AG, a global leader in the manufacturing of metal–to–metal seal and flow control solutions serving a variety of industries, for €217 million. SFC KOENIG produces highly engineered expanders and check valves for critical applications across the transportation, hydraulic, aviation and medical markets. This deal will augment IDEX’s position in the highly-engineered sealing solutions space.
Last month, LUKAS Hydraulik GmbH, a subsidiary of IDEX, completed the acquisition of AWG Fittings GmbH in a €46.0 million cash-free, debt-free transaction. AWG is one of the leading manufacturers of mobile and stationary fire protection systems in the world. The acquisition is expected to boost the company’s Fire Suppression platform with its highly integrated firefighting technology and equipment.
Other Stocks to Consider
Some better-ranked stocks in the industry include Illinois Tool Works Inc. (ITW - Free Report) , Luxfer Holdings PLC (LXFR - Free Report) and Metso Corporation , 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 >>