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Why Applied Industrial is a Must-Add Stock to Your Portfolio
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On May 1, we issued an updated research report on Applied Industrial Technologies, Inc. (AIT - Free Report) .
Existing Scenario
Over the last one month, shares of this Zacks Rank #1 (Strong Buy) stock yielded a return of 5.09%, outperforming 4.89% growth recorded by the Zacks categorized Machinery-General Industrial industry.
Notably, the attractiveness of this stock as a current investment choice is further accentuated by its favorable Value Growth and Momentum Style Score ‘B’.
The company reported better-than-expected third-quarter fiscal 2017 results (ended Mar 31, 2017). Quarterly earnings and revenues surpassed the Zacks Consensus Estimate by 21% and 6.8%, respectively. The upside was driven by favorable foreign currency translation and acquisition benefits. These positives are likely to boost the company’s earnings and revenues even in the quarters ahead. The company raised its fiscal 2017 earnings guidance to the $2.74–$2.84 per share range, as against the previous range of $2.50–$2.60 per share.
Applied Industrial in aimed at strengthening its business on the back of strategic acquisitions. On Mar 6, the company acquired Sentinel Fluid Controls, a premium distributer of lubrication and hydraulic solutions, systems and components. Sentinel Fluid Controls offers non-imitable custom, mobile, standard and industrial, hydraulic and lubrication systems. The company’s plus related engineering repair capabilities and services are also famous in the market. Applied Industrial noted that this buyout would reinforce its Fluid Power business, moving ahead.
In addition, the company intends to widen its margins over the long term, on the back of disciplined cost management and greater operational efficacy, across all business domains. In order to bring down operational costs and align productive resources with existing opportunities, customer demand and market conditions, the company implemented numerous restructuring programs (especially in the upstream oil and gas businesses). In fiscal 2016, Applied Industrial incurred restructuring expense worth $8.8 billion for lowering headcounts and consolidating locations within its service center-based Distribution segment. The company believes that these moves would boost its top- and bottom-line performance in the second-half of fiscal 2017.
Applied Industrial intends to bolster its near-term sales on the back of strategic marketing projects. In sync with this, the company launched a revamped website on Aug 25, 2016. The company stated that its redesigned digital platform would facilitate interactive functionality and navigation. It mentioned that renewed digital means of marketing are not only offering better customer services, but are also assisting in tapping demand from new end markets. Notably, the response toward this move is becoming stronger over time, in terms of customer feedback, site traffic, user registrations and order trends.
Other Stocks to Consider
Some other stocks worth considering in the industry are listed below:
A. O. Smith Corporation (AOS - Free Report) , which currently carries a Zacks Rank #2 (Buy), generated an average earnings surprise of 4.88% over the last four quarters.
Avery Dennison Corporation (AVY - Free Report) holds a Zacks Rank #2 and has an average earnings surprise of 5.53% for the past four quarters.
Sell These Stocks.
Now. Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>.
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Why Applied Industrial is a Must-Add Stock to Your Portfolio
On May 1, we issued an updated research report on Applied Industrial Technologies, Inc. (AIT - Free Report) .
Existing Scenario
Over the last one month, shares of this Zacks Rank #1 (Strong Buy) stock yielded a return of 5.09%, outperforming 4.89% growth recorded by the Zacks categorized Machinery-General Industrial industry.
Notably, the attractiveness of this stock as a current investment choice is further accentuated by its favorable Value Growth and Momentum Style Score ‘B’.
The company reported better-than-expected third-quarter fiscal 2017 results (ended Mar 31, 2017). Quarterly earnings and revenues surpassed the Zacks Consensus Estimate by 21% and 6.8%, respectively. The upside was driven by favorable foreign currency translation and acquisition benefits. These positives are likely to boost the company’s earnings and revenues even in the quarters ahead. The company raised its fiscal 2017 earnings guidance to the $2.74–$2.84 per share range, as against the previous range of $2.50–$2.60 per share.
Applied Industrial in aimed at strengthening its business on the back of strategic acquisitions. On Mar 6, the company acquired Sentinel Fluid Controls, a premium distributer of lubrication and hydraulic solutions, systems and components. Sentinel Fluid Controls offers non-imitable custom, mobile, standard and industrial, hydraulic and lubrication systems. The company’s plus related engineering repair capabilities and services are also famous in the market. Applied Industrial noted that this buyout would reinforce its Fluid Power business, moving ahead.
In addition, the company intends to widen its margins over the long term, on the back of disciplined cost management and greater operational efficacy, across all business domains. In order to bring down operational costs and align productive resources with existing opportunities, customer demand and market conditions, the company implemented numerous restructuring programs (especially in the upstream oil and gas businesses). In fiscal 2016, Applied Industrial incurred restructuring expense worth $8.8 billion for lowering headcounts and consolidating locations within its service center-based Distribution segment. The company believes that these moves would boost its top- and bottom-line performance in the second-half of fiscal 2017.
Applied Industrial intends to bolster its near-term sales on the back of strategic marketing projects. In sync with this, the company launched a revamped website on Aug 25, 2016. The company stated that its redesigned digital platform would facilitate interactive functionality and navigation. It mentioned that renewed digital means of marketing are not only offering better customer services, but are also assisting in tapping demand from new end markets. Notably, the response toward this move is becoming stronger over time, in terms of customer feedback, site traffic, user registrations and order trends.
Other Stocks to Consider
Some other stocks worth considering in the industry are listed below:
Caterpillar Inc. (CAT - Free Report) has a positive average earnings surprise of 40.25% for the trailing four quarters and boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
A. O. Smith Corporation (AOS - Free Report) , which currently carries a Zacks Rank #2 (Buy), generated an average earnings surprise of 4.88% over the last four quarters.
Avery Dennison Corporation (AVY - Free Report) holds a Zacks Rank #2 and has an average earnings surprise of 5.53% for the past four quarters.
Sell These Stocks.
Now. Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>.