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Standard Motor (SMP) Upgraded to Buy on Bright Prospects
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On May 30, Zacks Investment Research upgraded Standard Motor Products Inc. (SMP - Free Report) to a Zacks Rank #2 (Buy). Going by the Zacks model, companies carrying a Zacks Rank #2 have higher chances of outperforming the broader market.
The company reported adjusted earnings of 74 cents per share in the first quarter of 2017, higher than 55 cents in the year-ago quarter. Earnings also topped the Zacks Consensus Estimate of 65 cents.
For the same period, revenues rose 18.2% year over year to $282.4 million and beat the Zacks Consensus Estimate of $264 million.
Standard Motor has been focusing on reducing production cost to benefit its results. The company announced to close down its facility in Grapevine, TX and relocate the diesel injection operations to existing facilities in Greenville, SC, which is the center of excellence for gas injection products.
The Temperature Control operation will be shifted to Reynosa, Mexico, where the company has highly efficient operations in the field. It will also move its coil operation from Greenville to the main coil manufacturing location in Bialystok, Poland.
The company expects to generate pre-tax savings of $6–$7 million after completion of these reallocations by 2017.
The company has promising long-term business prospects that allow it to deploy capital effectively and enhance the shareholder value.
Standard Motor is not significantly exposed to the cyclical nature of an automotive industry since it is focused on the aftermarket, where it is a leading player. Demand for repair products is expected to rise, thanks to growth in the used-vehicles market and an increase in the average age of automobiles in the U.S.
Additionally, low gas prices are leading to a rise in the use of automobiles, thus increasing the number of miles traveled. This will have a favorable impact on the company’s financial results.
The company also undertakes initiatives to decrease costs and manufacture products which it used to buy before. Further, it enjoys a strong competitive advantage owing to brand recognition and a sizeable customer base.
Standard Motor has also outperformed the Zacks categorized Auto/Truck Replacement Parts industry in the last three months. Its shares have declined 1% during the period, whereas the industry has recorded a loss of 3%.
Allison Transmission has an expected long-term growth rate of 11%.
Ferrari has an expected long-term growth rate of 14.1%.
Dana has an expected long-term growth rate of 3%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Standard Motor (SMP) Upgraded to Buy on Bright Prospects
On May 30, Zacks Investment Research upgraded Standard Motor Products Inc. (SMP - Free Report) to a Zacks Rank #2 (Buy). Going by the Zacks model, companies carrying a Zacks Rank #2 have higher chances of outperforming the broader market.
The company reported adjusted earnings of 74 cents per share in the first quarter of 2017, higher than 55 cents in the year-ago quarter. Earnings also topped the Zacks Consensus Estimate of 65 cents.
For the same period, revenues rose 18.2% year over year to $282.4 million and beat the Zacks Consensus Estimate of $264 million.
Standard Motor has been focusing on reducing production cost to benefit its results. The company announced to close down its facility in Grapevine, TX and relocate the diesel injection operations to existing facilities in Greenville, SC, which is the center of excellence for gas injection products.
The Temperature Control operation will be shifted to Reynosa, Mexico, where the company has highly efficient operations in the field. It will also move its coil operation from Greenville to the main coil manufacturing location in Bialystok, Poland.
The company expects to generate pre-tax savings of $6–$7 million after completion of these reallocations by 2017.
The company has promising long-term business prospects that allow it to deploy capital effectively and enhance the shareholder value.
Standard Motor is not significantly exposed to the cyclical nature of an automotive industry since it is focused on the aftermarket, where it is a leading player. Demand for repair products is expected to rise, thanks to growth in the used-vehicles market and an increase in the average age of automobiles in the U.S.
Additionally, low gas prices are leading to a rise in the use of automobiles, thus increasing the number of miles traveled. This will have a favorable impact on the company’s financial results.
The company also undertakes initiatives to decrease costs and manufacture products which it used to buy before. Further, it enjoys a strong competitive advantage owing to brand recognition and a sizeable customer base.
Standard Motor has also outperformed the Zacks categorized Auto/Truck Replacement Parts industry in the last three months. Its shares have declined 1% during the period, whereas the industry has recorded a loss of 3%.
Standard Motor Products, Inc. Price and Consensus
Standard Motor Products, Inc. Price and Consensus | Standard Motor Products, Inc. Quote
Key Picks
Other well-placed companies in the auto space include Allison Transmission Holdings Inc. (ALSN - Free Report) , Ferrari N.V. (RACE - Free Report) and Dana Incorporated (DAN - Free Report) . All three sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Allison Transmission has an expected long-term growth rate of 11%.
Ferrari has an expected long-term growth rate of 14.1%.
Dana has an expected long-term growth rate of 3%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>