With the second-quarter 2016 earnings season on its last leg, investors are waiting to see how the major companies perform.
While estimating the performances of industrial stocks, we note that headwinds like economic sluggishness of major industrial goods’ consumers like China, forex issues and dismal pricing conditions in energy & mining markets might limit growth.
According to the Zacks Industry classification, the industrial stocks are broadly grouped under Industrial Products, one of the 16 Zacks sectors. Per our latest Earnings Preview article, this industry is likely to underperform this earnings season.
In fact, our report dated Aug 4, 2016 indicates that overall earnings for the sector are expected to decrease 4.9% year over year in the second quarter, while revenues are expected to fall 5.6%. Notably, the sector had witnessed a decline of 21.6% and 7.9% in earnings and revenues, respectively, in the first quarter.
Recently, two industrial stocks – RBC Bearings Inc. and Alamo Group, Inc. (ALG - Free Report) – reported quarterly results. RBC Bearings’ adjusted earnings in first-quarter fiscal 2017 came in below the Zacks Consensus Estimate as well as the year-ago tally by a penny. While Alamo Group’s second-quarter 2016 adjusted earnings of 92 cents per share missed the Zacks Consensus Estimate by 8.9% but increased 2.2% from the year-ago tally.
With more and more companies slated to report their second-quarter results soon, let’s take a look at how these three industrial stocks might fare.
What Awaits for these Industrial Stocks?
Regal Beloit Corporation (RBC - Free Report) is slated to report second-quarter 2016 results, after the market closes on Aug 8. In the last four quarters, the company reported an average negative earnings surprise of 1.87%. Our proven model does not conclusively show that Regal Beloit is likely to beat on earnings in the to-be-reported quarter. This is because the company carries a Zacks Rank #4 (Sell) and has as an Earnings ESP (the difference between the Most Accurate estimate and the Zacks Consensus Estimate) of -2.38%. Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions. The Zacks Consensus Estimate for Regal Beloit has been revised downward by roughly 1% over the last 60 days and is currently pegged at $1.26 per share for the second quarter.
CUI Global, Inc. is set to report second-quarter 2016 results, after the market closes on Aug 8. In the last four quarters, the company reported an average negative earnings surprise of 48.75%. However, our proven model does not conclusively show that CUI Global is likely to beat on earnings this quarter. This is because the company has an Earnings ESP is 0.00%. The Zacks Consensus Estimate for the stock stands at a loss of 3 cents per share for the second quarter. The company carries a Zacks Rank #3 (Hold). Though a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increase the predictive power of ESP, a 0.00% Earnings ESP makes surprise prediction difficult.
Digital Ally Inc. (DGLY - Free Report) will release its second-quarter 2016 results, after the market closes on Aug 8. In the last four quarters, the company reported an average negative earnings surprise of 107.54%. However, our proven model does not conclusively show that Digital Ally is likely to beat on earnings this quarter. This because the company has an Earnings ESP of +30% but an unfavorable Zacks Rank #4. The Zacks Consensus Estimate for the stock stands at a loss of 20 cents per share for the second quarter.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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With the second-quarter 2016 earnings season on its last leg, investors are waiting to see how the major companies perform.
While estimating the performances of industrial stocks, we note that headwinds like economic sluggishness of major industrial goods’ consumers like China, forex issues and dismal pricing conditions in energy & mining markets might limit growth.
According to the Zacks Industry classification, the industrial stocks are broadly grouped under Industrial Products, one of the 16 Zacks sectors. Per our latest Earnings Preview article, this industry is likely to underperform this earnings season.
In fact, our report dated Aug 4, 2016 indicates that overall earnings for the sector are expected to decrease 4.9% year over year in the second quarter, while revenues are expected to fall 5.6%. Notably, the sector had witnessed a decline of 21.6% and 7.9% in earnings and revenues, respectively, in the first quarter.
Recently, two industrial stocks – RBC Bearings Inc. and Alamo Group, Inc. (ALG - Free Report) – reported quarterly results. RBC Bearings’ adjusted earnings in first-quarter fiscal 2017 came in below the Zacks Consensus Estimate as well as the year-ago tally by a penny. While Alamo Group’s second-quarter 2016 adjusted earnings of 92 cents per share missed the Zacks Consensus Estimate by 8.9% but increased 2.2% from the year-ago tally.
With more and more companies slated to report their second-quarter results soon, let’s take a look at how these three industrial stocks might fare.
What Awaits for these Industrial Stocks?
Regal Beloit Corporation (RBC - Free Report) is slated to report second-quarter 2016 results, after the market closes on Aug 8. In the last four quarters, the company reported an average negative earnings surprise of 1.87%. Our proven model does not conclusively show that Regal Beloit is likely to beat on earnings in the to-be-reported quarter. This is because the company carries a Zacks Rank #4 (Sell) and has as an Earnings ESP (the difference between the Most Accurate estimate and the Zacks Consensus Estimate) of -2.38%. Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions. The Zacks Consensus Estimate for Regal Beloit has been revised downward by roughly 1% over the last 60 days and is currently pegged at $1.26 per share for the second quarter.
CUI Global, Inc. is set to report second-quarter 2016 results, after the market closes on Aug 8. In the last four quarters, the company reported an average negative earnings surprise of 48.75%. However, our proven model does not conclusively show that CUI Global is likely to beat on earnings this quarter. This is because the company has an Earnings ESP is 0.00%. The Zacks Consensus Estimate for the stock stands at a loss of 3 cents per share for the second quarter. The company carries a Zacks Rank #3 (Hold). Though a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increase the predictive power of ESP, a 0.00% Earnings ESP makes surprise prediction difficult.
Digital Ally Inc. (DGLY - Free Report) will release its second-quarter 2016 results, after the market closes on Aug 8. In the last four quarters, the company reported an average negative earnings surprise of 107.54%. However, our proven model does not conclusively show that Digital Ally is likely to beat on earnings this quarter. This because the company has an Earnings ESP of +30% but an unfavorable Zacks Rank #4. The Zacks Consensus Estimate for the stock stands at a loss of 20 cents per share for the second quarter.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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