Shares of Altra Industrial Motion Corp. have increased notably in the past three months. Strengthening end-market demand, sound shareholder-friendly policies and increased projections seem to have boosted sentiments for the stock.

The Braintree, MA-based company belongs to the Zacks Manufacturing - General Industrial industry, which comes under the ambit of the Zacks Industrial Products sector. The industry is in the top 28% (with a rank of 71) of more than 250 Zacks industries. Altra Industrial has a $4.1-billion market capitalization and it currently carries a Zacks Rank #3 (Hold).

In the past three months, the company’s shares have gained 16.6% compared with the industry’s growth of 5.4%. Notably, the S&P 500 has risen 9.5% and the sector has increased 1.8% during the same period.

Image Source: Zacks Investment Research

Factors Influencing the Stock

Altra Industrial reported impressive results for first-quarter 2021. Earnings in the quarter surpassed the Zacks Consensus Estimate by 13.16% and sales beat the same by 3.09%. On a year-over-year basis, the bottom line expanded 32.3% on the back of revenue and margin improvement.

Impressive performance and healthy growth opportunities seem to have favored the hike in the stock price. Notably, strengthening demand in end markets — especially in assembly equipment, general factory automation and robotics — and a well-diversified business structure might prove tailwinds for the company in the quarters ahead. Also, opportunities, stemming from the e-commerce platform, and improving technological capabilities might aid.

For 2021, Altra Industrial anticipates Non-GAAP earnings of $3.09-$3.24 per share, higher than $2.95-$3.15 mentioned previously. Revenues for the year are expected to be $1,820-$1,850 million, up from $1,790-$1,830 million stated earlier.

In addition, Altra Industrial’s healthy cash positions and its efforts to lower debts add to the company’s attractiveness. Notably, debts of $20 million were repaid in the first quarter, while available liquidity was $544 million exiting the quarter. Further, the company’s policy of rewarding shareholders through dividends impresses shareholders.

Currently, the Zacks Consensus Estimate for its earnings is pegged at $3.24 for 2021, marking an increase of 2.5% from the 60-day-ago figure. Also, the consensus estimate for the second quarter improved from 79 cents to 81 cents. Such an upward revision in earnings estimates is reflective of healthy operating conditions for the company.