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End-Market Strength & Sound Capital Aid Altra Industrial (AIMC)
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We have issued an updated research report on Altra Industrial Motion Corp. on Dec 15.
The company is based in Braintree, MA, and currently has a $3.4-billion market capitalization. It is a specialist in making automation, motion control, electromechanical and power transmission products. The company presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Altra Industrial belongs to the Zacks Manufacturing - General Industrial industry, which comes under the Zacks Industrial Products sector. The industry is in the top 21% (with a rank of 54) of more than 250 Zacks industries.
Important factors positively influencing Altra Industrial are briefly discussed below.
Market-Related and Other Tailwinds: The company’s exposure in multiple end-markets is a boon. It gained from strong demand in renewable energy, factory automation and other markets in the third quarter of 2020. Healthy prospects in transportation and defense are predicted to be beneficial in the quarters ahead. Also, solid demand for automation might be advantageous for the semiconductor market.
In addition to the above-mentioned facts, the company is poised to benefit from its e-commerce capabilities, innovation efforts and solid product offerings. Also, supply-chain actions and pricing initiatives are added boons.
Capital Allocation: The company effectively uses part of its capital to invest in deleveraging balance sheet and rewarding shareholders handsomely. Such actions are supported by a healthy cash position. It had cash of $239 million and liquidity under the credit line of $295 million at the end of the third quarter of 2020.
In relation to lowering debts, it is worth noting here that Altra Industrial repaid $100 million of its borrowings under revolving credit facility and $90 million under term-loan facility in the first three quarters of 2020. Exiting the third quarter, its long-term debts were $1,476.9 million. Also, its times interest earned and total debt to total capital were at 1.0X and 44.1%, respectively. Notably, these metrics compare favorably with debts of $1,535.6 million, times interest earned of 0.7X and total debt to total capital of 46.2% at the end of second-quarter 2020.
As regard to rewards for shareholders, the company spent $24.9 million for paying dividends. Notably, it also increased its quarterly dividend rate from 4 cents to 6 cents per share in October 2020.
Company Projections: Altra Industrial positively revised its projections for 2020. Sales for the year are projected to be $1,690-$1,710 million, up from the previously mentioned $1,580-$1,640 million.
Non-GAAP earnings are anticipated to be $2.70-$2.82 as compared with the previously stated $2.05-$2.30 per share. Also, non-GAAP adjusted earnings before interest, taxes, depreciation and amortization are now expected to be $355-$370 million, up from $305-$330 million stated earlier, and tax rate will be 20-21% versus the previously stated 21-23%. Capital expenditure has been lowered from the previously mentioned $40-$45 million to $34-$40 million.
Price Performance and Earnings Estimate Trend: Market sentiments seem to be working in favor of Altra Industrial for quite some time now. In the past three months, the company’s shares have gained 31.5% compared with the industry’s growth of 11.1%. During the same timeframe, the sector has expanded 14.4% and the S&P 500 has grown 7.7%.
Notably, the company’s price performance is better than three peers from the industry, including Graco Inc. (GGG - Free Report) , IDEX Corporation (IEX - Free Report) and Nordson Corporation (NDSN - Free Report) . In the past three months, Graco’s shares gained 14.8%, IDEX grew 5.3% and Nordson rose 1.8%.
Meanwhile, the company’s earnings estimates have been raised, reflecting positive sentiments for the stock. In the past 60 days, the Zacks Consensus Estimate for earnings is pegged at $2.81 for 2020 and $3.30 for 2021, suggesting growth of 23.2% and 21.3% from the respective 60-day-ago numbers. The revisions came on the back of three positive revisions for each of the years.
Also, earnings have been raised by 27.8% to 69 cents for the fourth quarter of 2020. Three upward revisions were recorded in the past two months.
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.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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End-Market Strength & Sound Capital Aid Altra Industrial (AIMC)
We have issued an updated research report on Altra Industrial Motion Corp. on Dec 15.
The company is based in Braintree, MA, and currently has a $3.4-billion market capitalization. It is a specialist in making automation, motion control, electromechanical and power transmission products. The company presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Altra Industrial belongs to the Zacks Manufacturing - General Industrial industry, which comes under the Zacks Industrial Products sector. The industry is in the top 21% (with a rank of 54) of more than 250 Zacks industries.
Important factors positively influencing Altra Industrial are briefly discussed below.
Market-Related and Other Tailwinds: The company’s exposure in multiple end-markets is a boon. It gained from strong demand in renewable energy, factory automation and other markets in the third quarter of 2020. Healthy prospects in transportation and defense are predicted to be beneficial in the quarters ahead. Also, solid demand for automation might be advantageous for the semiconductor market.
In addition to the above-mentioned facts, the company is poised to benefit from its e-commerce capabilities, innovation efforts and solid product offerings. Also, supply-chain actions and pricing initiatives are added boons.
Capital Allocation: The company effectively uses part of its capital to invest in deleveraging balance sheet and rewarding shareholders handsomely. Such actions are supported by a healthy cash position. It had cash of $239 million and liquidity under the credit line of $295 million at the end of the third quarter of 2020.
In relation to lowering debts, it is worth noting here that Altra Industrial repaid $100 million of its borrowings under revolving credit facility and $90 million under term-loan facility in the first three quarters of 2020. Exiting the third quarter, its long-term debts were $1,476.9 million. Also, its times interest earned and total debt to total capital were at 1.0X and 44.1%, respectively. Notably, these metrics compare favorably with debts of $1,535.6 million, times interest earned of 0.7X and total debt to total capital of 46.2% at the end of second-quarter 2020.
As regard to rewards for shareholders, the company spent $24.9 million for paying dividends. Notably, it also increased its quarterly dividend rate from 4 cents to 6 cents per share in October 2020.
Company Projections: Altra Industrial positively revised its projections for 2020. Sales for the year are projected to be $1,690-$1,710 million, up from the previously mentioned $1,580-$1,640 million.
Non-GAAP earnings are anticipated to be $2.70-$2.82 as compared with the previously stated $2.05-$2.30 per share. Also, non-GAAP adjusted earnings before interest, taxes, depreciation and amortization are now expected to be $355-$370 million, up from $305-$330 million stated earlier, and tax rate will be 20-21% versus the previously stated 21-23%. Capital expenditure has been lowered from the previously mentioned $40-$45 million to $34-$40 million.
Price Performance and Earnings Estimate Trend: Market sentiments seem to be working in favor of Altra Industrial for quite some time now. In the past three months, the company’s shares have gained 31.5% compared with the industry’s growth of 11.1%. During the same timeframe, the sector has expanded 14.4% and the S&P 500 has grown 7.7%.
Notably, the company’s price performance is better than three peers from the industry, including Graco Inc. (GGG - Free Report) , IDEX Corporation (IEX - Free Report) and Nordson Corporation (NDSN - Free Report) . In the past three months, Graco’s shares gained 14.8%, IDEX grew 5.3% and Nordson rose 1.8%.
Meanwhile, the company’s earnings estimates have been raised, reflecting positive sentiments for the stock. In the past 60 days, the Zacks Consensus Estimate for earnings is pegged at $2.81 for 2020 and $3.30 for 2021, suggesting growth of 23.2% and 21.3% from the respective 60-day-ago numbers. The revisions came on the back of three positive revisions for each of the years.
Altra Industrial Motion Corp. Price and Consensus
Altra Industrial Motion Corp. price-consensus-chart | Altra Industrial Motion Corp. Quote
Also, earnings have been raised by 27.8% to 69 cents for the fourth quarter of 2020. Three upward revisions were recorded in the past two months.
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.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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