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Should RBC Bearings (ROLL) Be in Your Portfolio Right Now?

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On Dec 19, 2016, Zacks Investment Research upgraded RBC Bearings Inc. to a Zacks Rank #3 (Hold) from a Zacks Rank #4 (Sell). Going by the Zacks model, companies with a Zacks Rank #3 have chances of delivering in-line performances with the broader market over the upcoming quarters.

Why a Neutral Stance?

Post second-quarter fiscal 2017 earnings release, RBC Bearings’ shares recorded a return of 32.25% – outperforming the Zacks categorized Machinery-General Industrial industry return of 13.79%.

Notably, the stock’s projected sales growth (F1/F0) and earnings per share growth (F1/F0) are currently pegged at 4.86% and 2.23%, respectively.

Robust aerospace business and increased demand for mining, marine and semiconductor products are expected to boost the company’s revenues, moving ahead. Notably, the company plans to improve its external and internal commercial growth via the available credit under the credit facilities, as well as net cash flow generated from operating activities. Moreover, RBC Bearings believes its earnings and backlog to likely improve on the back of higher sales and greater operational efficiency in the upcoming quarters.

However, headwinds such as weak energy resource prices, UK’s Brexit vote, sluggish Chinese economy and a stronger U.S. dollar might hurt near-term results. Moreover, issues such as extensive industry rivalry and increasing costs, if left unchecked, remain major causes of worry for the company.

Over the last 30 days, the Zacks Consensus Estimate for the stock remained unchanged for fiscal 2017, however moved north by 5.1% for fiscal 2018.

RBC BEARINGS Price and Consensus

 

RBC BEARINGS Price and Consensus | RBC BEARINGS Quote

Other Stocks to Consider

Better-ranked stocks from the same space are ACCO Brands Corporation (ACCO - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Alarm.Com Holdings, Inc. (ALRM - Free Report) .

ACCO Brands Corporation posted an average positive earnings surprise of 23.93%, over the four trailing quarters. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Industrial Technologies currently carries a Zacks Rank #2 (Buy). It posted an average positive earnings surprise of 4.93%, over the last four quarters.

Alarm.Com Holdings also carries a Zacks Rank #2. The company delivered an average positive earnings surprise of 165.56%, over the trailing four quarters.

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