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Altra Industrial (AIMC) Poised to Grow Amid Macro Headwinds
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On Dec 30, 2016, we issued an updated research report on premium industrial electrical equipment company, Altra Industrial Motion Corp. .
Altra Industrial Motion’s stock is currently engulfed with both optimistic and pessimistic aspects.
Post third-quarter 2016 earnings release, shares of this Zacks Rank #3 (Hold) stock recorded a return of 28.40% – outperforming the 11.25% return provided by the Zacks categorized Machinery-General Industrial industry.
The company is poised to grow on the back of increased sales, acquisitions, strategic restructuring moves and lower costs.
However, we believe that issues such as adverse foreign currency translation, increasing debt and extensive industry rivalry might curtail growth in the quarters ahead. Notably, the stock’s projected earnings per share growth (F1/F0) and sales growth (F1/F0) are valued at -9.55% and -4.91%, respectively.
Over the last seven days, the Zacks Consensus Estimate for the stock has remained unchanged for both 2016 and 2017, reflecting neutral market sentiments.
Detailed View
Altra Industrial Motion is well poised to benefit from its diversified product portfolio and large customer base in the energy, general industrial, material handling, metals, mining, special machinery, transportation, & turf and garden industries. In addition, the company has initiated certain restructuring and cost-saving strategies, in a bid to keep costs under control as well as align its business operations with the present demand levels. It intends to lower the number of its facilities by 20–30% and improve its supply chain worldwide as well.
As part of these restructuring initiatives, the company completed five facility consolidations in the second quarter, closed one facility in the third; while another is scheduled for closure in the fourth quarter.
Further, Altra Industrial Motion follows a consistent policy of rewarding its shareholders through dividend payments and share buybacks. Over the long term, the company anticipates becoming the leading global provider of electrochemical power transmission solutions.
Effective supply chain management and accretive acquisitions would remain the company's preferred modes for enhancing profitability. Recently, the company announced its plans to acquire the Stromag business of GKN plc., known for its tailored-engineered solution for customers in various markets.
However, the company’s revenues are being hurt due to adverse foreign currency translation and dreary conditions prevailing in the industrial-end markets. The company also lately narrowed its sales guidance to $705–$715 million from the previous projection of $700–$720 million.
Moreover, Altra Industrial Motion faces a complex and competitive environment due to its wide diversity of products as well as vastness of the markets it serves. Difficulties or delays in research and development, or production and services, apart from failure of new products and technologies in the market, may affect its competitive position, moving ahead. Notably, increasing debt remains a major cause of worry for the company.
Stocks to Consider
Better-ranked stocks from the same space are listed below:
ACCO Brands Corporation (ACCO - Free Report) posted an average positive earnings surprise of 23.93%, over the four trailing quarters. It currently carries a Zacks Rank #2 (Buy).
ABB Ltd. also carries a Zacks Rank #2. It posted an average positive earnings surprise of 23.50%, over the last four quarters.
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Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
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Altra Industrial (AIMC) Poised to Grow Amid Macro Headwinds
On Dec 30, 2016, we issued an updated research report on premium industrial electrical equipment company, Altra Industrial Motion Corp. .
Altra Industrial Motion’s stock is currently engulfed with both optimistic and pessimistic aspects.
Post third-quarter 2016 earnings release, shares of this Zacks Rank #3 (Hold) stock recorded a return of 28.40% – outperforming the 11.25% return provided by the Zacks categorized Machinery-General Industrial industry.
The company is poised to grow on the back of increased sales, acquisitions, strategic restructuring moves and lower costs.
However, we believe that issues such as adverse foreign currency translation, increasing debt and extensive industry rivalry might curtail growth in the quarters ahead. Notably, the stock’s projected earnings per share growth (F1/F0) and sales growth (F1/F0) are valued at -9.55% and -4.91%, respectively.
Over the last seven days, the Zacks Consensus Estimate for the stock has remained unchanged for both 2016 and 2017, reflecting neutral market sentiments.
Detailed View
Altra Industrial Motion is well poised to benefit from its diversified product portfolio and large customer base in the energy, general industrial, material handling, metals, mining, special machinery, transportation, & turf and garden industries. In addition, the company has initiated certain restructuring and cost-saving strategies, in a bid to keep costs under control as well as align its business operations with the present demand levels. It intends to lower the number of its facilities by 20–30% and improve its supply chain worldwide as well.
As part of these restructuring initiatives, the company completed five facility consolidations in the second quarter, closed one facility in the third; while another is scheduled for closure in the fourth quarter.
Further, Altra Industrial Motion follows a consistent policy of rewarding its shareholders through dividend payments and share buybacks. Over the long term, the company anticipates becoming the leading global provider of electrochemical power transmission solutions.
Effective supply chain management and accretive acquisitions would remain the company's preferred modes for enhancing profitability. Recently, the company announced its plans to acquire the Stromag business of GKN plc., known for its tailored-engineered solution for customers in various markets.
However, the company’s revenues are being hurt due to adverse foreign currency translation and dreary conditions prevailing in the industrial-end markets. The company also lately narrowed its sales guidance to $705–$715 million from the previous projection of $700–$720 million.
Moreover, Altra Industrial Motion faces a complex and competitive environment due to its wide diversity of products as well as vastness of the markets it serves. Difficulties or delays in research and development, or production and services, apart from failure of new products and technologies in the market, may affect its competitive position, moving ahead. Notably, increasing debt remains a major cause of worry for the company.
Stocks to Consider
Better-ranked stocks from the same space are listed below:
Alarm.Com Holdings, Inc. (ALRM - Free Report) delivered an average positive earnings surprise of whopping 165.56%, over the trailing four quarters. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ACCO Brands Corporation (ACCO - Free Report) posted an average positive earnings surprise of 23.93%, over the four trailing quarters. It currently carries a Zacks Rank #2 (Buy).
ABB Ltd. also carries a Zacks Rank #2. It posted an average positive earnings surprise of 23.50%, over the last four quarters.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>