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Middleby (MIDD) to Benefit From Products & Acquisitions

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On Mar 4, we issued an updated research report on The Middleby Corporation (MIDD - Free Report) .

In the past three months, this Zacks Rank #2 (Buy) stock has returned 16.8% compared with the industry’s growth of 3.4%.

Present Scenario

Middleby is poised to benefit from investments in product innovation and technological-advancement actions. Also, recovery in restaurant business, along with hike in preferences for automated cooking systems, beverage systems and ventless products, is likely to prove beneficial for the company in the quarters ahead. In addition, healthy home sales trend, digital marketing actions and sales initiatives are expected to be advantageous.

Middleby’s strong liquidity position adds to its strength. For instance, in the fourth quarter of 2020, its cash flow from operations increased 41.2% on a year-over-year basis to $208.6 million. Further, in the quarter, its free cash flow increased 54.4% to $208.3 million.

Moreover, the company believes in strengthening its businesses through addition of assets. Middleby’s acquisition of Wild Goose Filling (closed in December 2020) is expected to create strong growth opportunities for it in the canned beverages market. Also, its United Foodservice Equipment Group buyout in the same month is likely to strengthen its foodservice equipment offerings in China. Notably, acquired assets boosted its sales by 1.3% in the fourth quarter of 2020.

However, the company remains wary of the market-related challenges caused by the coronavirus pandemic on its near-term performance. Also, high debt levels can affect its financial obligations.

Other Key Picks

Some other top-ranked stocks from the same space are EnPro Industries, Inc. (NPO - Free Report) , Chart Industries, Inc. (GTLS - Free Report) and Dover Corporation (DOV - Free Report) . While EnPro Industries currently sports a Zacks Rank #1 (Strong Buy), Chart Industries and Dover carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

EnPro Industries delivered a positive earnings surprise of 310.81%, on average, in the trailing four quarters.

Chart Industries delivered a positive earnings surprise of 30.8%, on average, in the trailing four quarters.

Dover delivered a positive earnings surprise of 20.01%, on average, in the trailing four quarters.

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