We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Reasons Why You Should Sell Astec (ASTE) Stock Right Now
Read MoreHide Full Article
Astec Industries, Inc. (ASTE - Free Report) has been disappointing investors, of late, given that shares of this road building equipment maker have recorded a decline of 23.3% year to date. Here’s what might drive the stock lower and why investors should sell the stock.
Estimates Moving South
The Zacks Consensus Estimates for 2017 and 2018 have moved down in the past 60 days, reflecting bearish analyst sentiments. For 2017, the same has plunged 35.9% to $1.61, while for 2018 it dropped 10.8% to $2.96.
Negative Earnings Surprise History
The company missed the Zacks Consensus Estimate in three out of the trailing four quarters. Further, it recorded an average negative earnings surprise of 7.19% over the last four quarters.
Price Performance
Astec has underperformed the industry with respect to price performance over the past year. The stock has lost 21.3%, while the industry recorded growth of 47.6%.
Unfavorable Zacks Rank and Score
Astec currently carries a Zacks Rank #5 (Strong Sell) and has a VGM score of D. Here V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three scores (Value - B, Growth - A, Momentum - B). Such a score allows you to eliminate the negative aspects of stocks and select winners.
Expensive Valuation
Astec's trailing 12-month price earnings (P/E) ratio is 30.8, while the industry's average trailing 12-month P/E ratio is lower at 25.9. This implies that the stock is overvalued.
Weak Q3
Astec posted a net loss of 12 cents per share in third-quarter 2017, against earnings of 30 cents recorded in the prior-year quarter. The reported loss came in line with the Zacks Consensus Estimate. The quarter bore the impact of additional investment to make significant design upgrades to its customers’ Georgia and Arkansas wood-pellet plants.
Astec’s domestic sales edged down 1.7% year over year in the recently-reported quarter. Its total backlog dipped 1% to $386 million at the end of the quarter from $389 million reported at the end of third-quarter 2016.
Gloomy Outlook
Astec projects fourth-quarter 2017 earnings to be slightly below the third-quarter earnings, considering the Thanksgiving and Christmas holiday schedules. The company remains cautious for the fourth quarter due to product mix and delay in delivery dates.
Near-Term Headwinds Linger
Astec's results are expected to be hurt by strong U.S. dollar, volatile steel prices, as well as the dismal economic and political environment in Brazil. Additionally, adverse weather conditions, mounting pricing pressure and competition might thwart its performance, going forward.
Caterpillar has an expected long-term earnings growth rate of 10.3%. Its shares are up 44.6% year to date.
H&E Equipment Services has an expected long-term earnings growth rate of 15.6%. Year to date, its shares have rallied 42.3%.
Komatsu has an expected long-term earnings growth rate of 16.2%. Its shares have gained 42.7% during the same time frame.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can 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.
Image: Bigstock
Reasons Why You Should Sell Astec (ASTE) Stock Right Now
Astec Industries, Inc. (ASTE - Free Report) has been disappointing investors, of late, given that shares of this road building equipment maker have recorded a decline of 23.3% year to date. Here’s what might drive the stock lower and why investors should sell the stock.
Estimates Moving South
The Zacks Consensus Estimates for 2017 and 2018 have moved down in the past 60 days, reflecting bearish analyst sentiments. For 2017, the same has plunged 35.9% to $1.61, while for 2018 it dropped 10.8% to $2.96.
Negative Earnings Surprise History
The company missed the Zacks Consensus Estimate in three out of the trailing four quarters. Further, it recorded an average negative earnings surprise of 7.19% over the last four quarters.
Price Performance
Astec has underperformed the industry with respect to price performance over the past year. The stock has lost 21.3%, while the industry recorded growth of 47.6%.
Unfavorable Zacks Rank and Score
Astec currently carries a Zacks Rank #5 (Strong Sell) and has a VGM score of D. Here V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three scores (Value - B, Growth - A, Momentum - B). Such a score allows you to eliminate the negative aspects of stocks and select winners.
Expensive Valuation
Astec's trailing 12-month price earnings (P/E) ratio is 30.8, while the industry's average trailing 12-month P/E ratio is lower at 25.9. This implies that the stock is overvalued.
Weak Q3
Astec posted a net loss of 12 cents per share in third-quarter 2017, against earnings of 30 cents recorded in the prior-year quarter. The reported loss came in line with the Zacks Consensus Estimate. The quarter bore the impact of additional investment to make significant design upgrades to its customers’ Georgia and Arkansas wood-pellet plants.
Astec’s domestic sales edged down 1.7% year over year in the recently-reported quarter. Its total backlog dipped 1% to $386 million at the end of the quarter from $389 million reported at the end of third-quarter 2016.
Gloomy Outlook
Astec projects fourth-quarter 2017 earnings to be slightly below the third-quarter earnings, considering the Thanksgiving and Christmas holiday schedules. The company remains cautious for the fourth quarter due to product mix and delay in delivery dates.
Near-Term Headwinds Linger
Astec's results are expected to be hurt by strong U.S. dollar, volatile steel prices, as well as the dismal economic and political environment in Brazil. Additionally, adverse weather conditions, mounting pricing pressure and competition might thwart its performance, going forward.
Key Picks
Some better-ranked stocks in the same sector are Caterpillar Inc. (CAT - Free Report) , H&E Equipment Services, Inc. (HEES - Free Report) and Komatsu Ltd. (KMTUY - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Caterpillar has an expected long-term earnings growth rate of 10.3%. Its shares are up 44.6% year to date.
H&E Equipment Services has an expected long-term earnings growth rate of 15.6%. Year to date, its shares have rallied 42.3%.
Komatsu has an expected long-term earnings growth rate of 16.2%. Its shares have gained 42.7% during the same time frame.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can 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.
Click here for Zacks' private trades >>