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TriMas (TRS) Gains 28% in a Year: What's Driving the Stock?

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Shares of TriMas Corporation (TRS - Free Report) surged around 28% over the last year driven by improved results aided by its focus on leveraging the TriMas Business Model as well as improved market conditions. Going forward, a strong pipeline of both product and process innovation will propel growth. Moreover, the company has fared better than the industry’s decline of 12%.
 
The company has a market cap of $1.4 billion. Over the past three months, its average volume of shares traded has been approximately 109K.
 
Further, TriMas surpassed the Zacks Consensus Estimate in two of the trailing four quarters, registering an average positive earnings surprise of 2.28%.
 



Let's take a look at the factors driving this Zacks Rank #2 (Buy) stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Driving Factors

TriMas delivered adjusted earnings of 48 cents per share in second-quarter 2018, up 20% from the prior-year quarter. The company benefited from its focus on commercial efforts, improved market conditions and realignment actions. TriMas projects earnings per share between $1.65 and $1.75 for 2018, marking year-over-year growth of 21% at the mid-point.

General industrial activity levels have improved, particularly in the United States, and this bodes well for TriMas. The company is well positioned to take advantage of the incremental volume opportunities and continues to capitalize on its internal sales growth programs. The company has also refocused certain commercial efforts including realigning and enhancing its sales functions along with improving cost structure.

The Specialty Products segment now incorporates the Lamons, Arrow Engine and Norris Cylinder industrial businesses. The segment will benefit from improved performance in these businesses on the back of recovering energy and industrial end-markets. Management also continues to assess the cost structure of the segment. Further, the U.S. Department of Commerce issued a preliminary finding recently to increase countervailing duties to combat China’s supply of high pressure steel cylinders. The preliminary finding increases duties on high pressure steel cylinders imported from China from the current 15.81% to a new level of 37.77%. If this is implemented, it will benefit the Norris Cylinder operations.

The packaging segment, the company’s most profitable business, is likely to benefit from new products and realignment of the segment’s manufacturing footprint. The company is developing its global marketing and salesforce to better align with end-markets and customers.
 
TriMas Corporation Price
 
TriMas Corporation Price

TriMas Corporation price | TriMas Corporation Quote

TriMas will continue to focus on leveraging the TriMas Business Model to drive performance which will fuel long-term growth. Its innovative solutions through product, process or service, as well as extensive resources will help enhance business performance. The company also has a strong pipeline of both product and process innovation that will sustain long-term growth and position its businesses to take advantage of market opportunities as well as minimize market disruptions.

Upward Estimate Revisions
 
TriMas' positive estimate revisions reflect analyst optimism on the company's potential as earnings growth is often an indication of robust prospects. Estimates for the company moved up over the past 60 days, reflecting analysts' bullish sentiments. The earnings estimate for 2018 has gone up 2.4% while the estimate for 2019 has gone up 2.2%.
 
The above-mentioned tailwinds have raised investors' optimism in the stock. Consequently, it is anticipated to drive the company's share price in the days ahead.
 
Other Stocks to Consider
 
Some other top-ranked stocks in the same space include W.W. Grainger, Inc. (GWW - Free Report) , Lawson Products, Inc. and Atkore International Group Inc. (ATKR - Free Report) . All the three stocks sport a Zacks Rank #1.
 
Grainger has a long-term earnings growth rate of 12.5%. Its shares have appreciated 132%, over the past year.
 
Lawson Products has a long-term earnings growth rate of 17.5%. The company’s shares have gained 42% in a year’s time.
 
Atkore International has a long-term earnings growth rate of 10%. The stock has rallied 70% in a year’s time.
 
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