Trimble Inc. ( TRMB Quick Quote TRMB - Free Report) has signed a definitive agreement to sell its construction logistics business to Command Alkon, a provider of a supplier collaboration platform for the heavy construction community. Notably, Trimble’s construction logistics business, which is part of its Building and Infrastructure segment, ensures seamless delivery of products with the help of tools that aid in tracking, scheduling, routing and communicating the fleet. Consequently, the business under review will complement Command Alkon’sfleet and workforce management solutions for the heavy work community. The deal is likely to be completed in the ongoing quarter. Divestment Rationale
We believe the latest decision of Trimble is expected to provide it an opportunity to diversify resources to explore promising growth avenues.
Moreover, the divestment of the construction logistics business is likely to shift the company’s focus toward further development of its building construction and civil engineering businesses, which contribute well to the revenues within the Building and Infrastructure segment. Notably, this segment accounts for the majority of Trimble’s total revenues. In second-quarter 2020, the segment contributed 40.2% to the company’s revenues. Further, the shifting focus is anticipated to help the company in achieving optimal usage of its wealth, skill and expertise, which were engaged in the construction logistics business till now. Apart from theBuilding and Infrastructure segment, the company will also be able to focus on the advancement of its other segments namely Geospatial, Resources and Utilities and Transportation segments. Additionally, the resources out of the recently announced divestiture are expected to aid Trimble’s shift toward software and automation, and help in the execution of its Connect and Scale 2025 strategy. Wrapping Up
Strategic decisions, including acquisitions and divestitures, have been contributing well toward the shaping up of Trimble’s growth trajectory.
The decisions have been adding strength to the company’s technology-driven robust product and solutions portfolio, which is centered on the integration of real-time positioning or location technologies with wireless communications and software or information technologies. We believe that Trimble’s portfolio strength will continue to aid its position as an original equipment manufacturer (OEM) of surveying, machine control and positioning products. This in turn is likely to drive earnings growth and improve revenue visibility in the long term. Zacks Rank & Stocks to Consider
Currently, Trimble carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader computer and technology sector are Square, Inc. ( SQ Quick Quote SQ - Free Report) , Zoom Video Communications, Inc. ( ZM Quick Quote ZM - Free Report) and Qorvo, Inc. ( QRVO Quick Quote QRVO - Free Report) . While Square and Zoom Video currently sport a Zacks Rank #1 (Strong Buy), Qorvo carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rates for Square, Zoom Video and Qorvo are pegged at 40.9%, 25% and 12.35%, respectively.
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