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Here's Why You Should Add Watts Water to Your Portfolio
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Watts Water Technologies, Inc. (WTS - Free Report) has been gaining from its continued focus on productivity, as well as cost-saving actions and acquisitions. Notably, the stock has appreciated 25.3% over the past six months, higher than the S&P 500’s gain of 13.7%. Watts Water has also outperformed the industry’s rally of 19.3% during the same time frame.
We believe this is the right time to add the stock as the company has solid prospects and is poised to maintain this bullish momentum in the near term.
Here are five reasons to pick this water safety and flow control-products maker.
Bullish Rank and Solid VGM Score: Watts Water currently carries a Zacks Rank #2 (Buy) and a favorable VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Upward Estimate Revisions: The Zacks Consensus Estimate for 2017 earnings per share has inched up 1% to $3.01 in the last 90 days. Also, the Consensus Estimate for 2018 moved up 3.7% to $3.39 during the same time frame.
Positive Surprise History: Watts Water has an impressive earnings surprise history. It outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average positive earnings surprise of 3.7%.
Key Strategic Initiatives to Drive Results: Volume growth, along with the continued execution of productivity and key strategic initiatives, including the company’s transformation and restructuring actions, will boost margin performance. Further, increasing investments at some of the manufacturing sites, in IT tools, will help drive productivity improvements in the near future.
Product innovation, Acquisitions to impel Growth: Watts Water consistently looks for opportunities to invest in new products and markets or divest its existing product lines. It also remains focused on maintaining stringent quality control and testing procedures at each manufacturing facility.
Watts Water has completed 21 acquisitions in the last 10 years. Its acquisition strategy focuses on businesses that promote key macro themes around safety & regulation, energy efficiency and water conservation.
In November 2016, the company acquired PVI Riverside Holdings, Inc. — a leading manufacturer of commercial stainless steel water-heating equipment. Further in December, Watts Water completed the acquisition of AERCO, a leading manufacturer of a wide range of high-efficiency commercial boilers and water heaters. These buyouts have enabled the company to expand its product breadth to the fast-growing markets for high efficiency boilers and hot-water heaters.
Other Stocks to Consider
Some other top-ranked stocks in the same sector include Analog Devices, Inc. (ADI - Free Report) and Broadcom Limited (AVGO - Free Report) , both flaunting a Zacks Rank #1, and AMETEK, Inc. (AME - Free Report) carrying a Zacks Rank #2.
Analog Devices has a long-term earnings growth rate of 10.4%. Its shares have rallied 22.1%, over the past six months.
Broadcom Limited has a long-term earnings growth rate of 13.8%. The company’s shares have been up 5.3% during the same time frame.
AMETEK has a long-term earnings growth rate of 11.9%. The stock has gained 25.8% in six months’ time.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Here's Why You Should Add Watts Water to Your Portfolio
Watts Water Technologies, Inc. (WTS - Free Report) has been gaining from its continued focus on productivity, as well as cost-saving actions and acquisitions. Notably, the stock has appreciated 25.3% over the past six months, higher than the S&P 500’s gain of 13.7%. Watts Water has also outperformed the industry’s rally of 19.3% during the same time frame.
We believe this is the right time to add the stock as the company has solid prospects and is poised to maintain this bullish momentum in the near term.
Here are five reasons to pick this water safety and flow control-products maker.
Bullish Rank and Solid VGM Score: Watts Water currently carries a Zacks Rank #2 (Buy) and a favorable VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Upward Estimate Revisions: The Zacks Consensus Estimate for 2017 earnings per share has inched up 1% to $3.01 in the last 90 days. Also, the Consensus Estimate for 2018 moved up 3.7% to $3.39 during the same time frame.
Positive Surprise History: Watts Water has an impressive earnings surprise history. It outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average positive earnings surprise of 3.7%.
Key Strategic Initiatives to Drive Results: Volume growth, along with the continued execution of productivity and key strategic initiatives, including the company’s transformation and restructuring actions, will boost margin performance. Further, increasing investments at some of the manufacturing sites, in IT tools, will help drive productivity improvements in the near future.
Product innovation, Acquisitions to impel Growth: Watts Water consistently looks for opportunities to invest in new products and markets or divest its existing product lines. It also remains focused on maintaining stringent quality control and testing procedures at each manufacturing facility.
Watts Water has completed 21 acquisitions in the last 10 years. Its acquisition strategy focuses on businesses that promote key macro themes around safety & regulation, energy efficiency and water conservation.
In November 2016, the company acquired PVI Riverside Holdings, Inc. — a leading manufacturer of commercial stainless steel water-heating equipment. Further in December, Watts Water completed the acquisition of AERCO, a leading manufacturer of a wide range of high-efficiency commercial boilers and water heaters. These buyouts have enabled the company to expand its product breadth to the fast-growing markets for high efficiency boilers and hot-water heaters.
Other Stocks to Consider
Some other top-ranked stocks in the same sector include Analog Devices, Inc. (ADI - Free Report) and Broadcom Limited (AVGO - Free Report) , both flaunting a Zacks Rank #1, and AMETEK, Inc. (AME - Free Report) carrying a Zacks Rank #2.
Analog Devices has a long-term earnings growth rate of 10.4%. Its shares have rallied 22.1%, over the past six months.
Broadcom Limited has a long-term earnings growth rate of 13.8%. The company’s shares have been up 5.3% during the same time frame.
AMETEK has a long-term earnings growth rate of 11.9%. The stock has gained 25.8% in six months’ time.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>