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Bull of the Day: Rockwell Automation (ROK)

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As the world becomes increasingly reliant on automation and companies providing technology solutions in this area, investors are scrambling to find the winners in this key market segment. One that could definitely be worth a closer look right now is Rockwell Automation (ROK - Free Report) , and especially if recent trends continue.

Why Rockwell?

Rockwell is in the often-underappreciated area of industrial automation, helping manufacturing and industrial companies to streamline their production processes. The Wisconsin-based company is in a number of different industries in this business too, including automotive, consumer products, commodity production, and infrastructure, just to name a few.

The company is also coming off a nice earnings report in the most recent quarter which includes a double-digit percentage beat compared to analyst estimates. Revenues were also up 8% in year-over-year terms, while guidance was also impressive for the company too.

What’s Next?

Thanks to this guidance increase and the general positive outlook for automation companies right now, analysts have been raising their earnings estimates for ROK stock as of late. We haven’t seen any analysts cut their estimates for the current year, though nine have increased their estimates in the past month, while we have seen a six to one ratio of increases to decreases for the current quarter too.

The magnitude of the estimate revisions has also been impressive, as we have seen a six percent lift in the current year consensus estimate in the past two months, while we have seen a similar boost in the following year estimate too. Add in an incredible history of living up to expectations in earnings season—including only one miss of expectations since mid 2014—and it is easy to see why ROK is a Zacks Rank #1 (Strong Buy) stock right now.

Rockwell Automation, Inc. Price, Consensus and EPS Surprise

Rockwell Automation, Inc. Price, Consensus and EPS Surprise | Rockwell Automation, Inc. Quote

Bottom Line

The automation world is increasingly in-focus for investors and many companies in the space are seeing strong outlooks. In fact, the industrial automation and robotics industry is ranked in the top 3% from an Zacks Industry Rank perspective, with only four other industries ranked higher out of more than 250 in total.

Clearly, there are some serious tailwinds for the automation world right now, be it in the broader economy, the transition towards more automation, or earnings estimates for a number of companies in the group. But while the broader space is looking pretty impressive right now, ROK stands out thanks to its impressive earnings report, strong industry focus, and good guidance going forward. So, if you are looking for a top-notch selection in the important automation market, definitely give Rockwell Automation a closer look this summer.


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