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Here's Why it is Worth Investing in Middleby (MIDD) Stock Now
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The Middleby Corporation (MIDD - Free Report) currently boasts promising prospects on strong order for its products, acquired assets, product introductions and a strong liquidity position.
The Zacks Rank #2 (Buy) company has a market capitalization of $9.8 billion. In the past six months, it has gained 30% compared with the industry’s growth of 7.9%.
Image Source: Zacks Investment Research
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Strong Order Growth: Middleby is expected to benefit from solid growth in order across all of its segments and robust backlog level in the quarters ahead. At the end of second-quarter 2021, the company’s total backlog level amounted to $994.2 million, indicating an increase of 37.2% sequentially. Improving demand environment across bakery and protein processing industries, along with recovery in restaurant, travel and leisure industries, is likely to drive its performance. Its investments in product innovations and technological-advancement actions are also likely to be beneficial.
Acquisition Benefits: The company intends to solidify its product portfolio and leverage business opportunities through the addition of assets. The acquisition of Novy (July 2021) is expected to strengthen its product offerings in the residential built-in cooking market. Also, the Wild Goose Filling buyout (December 2020) has been enhancing its growth opportunities in the canned beverages market. The buyout of United Foodservice Equipment Group (December 2020) has been boosting its foodservice equipment offerings. In the first and second quarters of 2021, acquisitions had a contribution of 1.8% and 2.2%, respectively, to revenue growth.
Healthy Liquidity Position: A robust liquidity position adds to the company’s strength. In the second quarter, its cash flow from operations totaled $112.7 million despite the increase in working capital of almost $33 million. Its cash and cash equivalents were $395.6 million, reflecting growth of 27.9% on a sequential basis. Exiting the second quarter, the company’s borrowing capacity was about $2.1 billion.
Estimate Revisions: In the past 30 days, analysts have increasingly become bullish on the company, as evident from positive earnings estimate revisions. The Zacks Consensus Estimate for its 2021 earnings has trended up from $8.08 to $8.37 on five upward estimate revisions versus one downward. Over the same timeframe, the consensus estimate for 2022 earnings has trended up from $9.17 to $9.69 on five upward estimate revisions against one downward.
Image: Bigstock
Here's Why it is Worth Investing in Middleby (MIDD) Stock Now
The Middleby Corporation (MIDD - Free Report) currently boasts promising prospects on strong order for its products, acquired assets, product introductions and a strong liquidity position.
The Zacks Rank #2 (Buy) company has a market capitalization of $9.8 billion. In the past six months, it has gained 30% compared with the industry’s growth of 7.9%.
Image Source: Zacks Investment Research
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Strong Order Growth: Middleby is expected to benefit from solid growth in order across all of its segments and robust backlog level in the quarters ahead. At the end of second-quarter 2021, the company’s total backlog level amounted to $994.2 million, indicating an increase of 37.2% sequentially. Improving demand environment across bakery and protein processing industries, along with recovery in restaurant, travel and leisure industries, is likely to drive its performance. Its investments in product innovations and technological-advancement actions are also likely to be beneficial.
Acquisition Benefits: The company intends to solidify its product portfolio and leverage business opportunities through the addition of assets. The acquisition of Novy (July 2021) is expected to strengthen its product offerings in the residential built-in cooking market. Also, the Wild Goose Filling buyout (December 2020) has been enhancing its growth opportunities in the canned beverages market. The buyout of United Foodservice Equipment Group (December 2020) has been boosting its foodservice equipment offerings. In the first and second quarters of 2021, acquisitions had a contribution of 1.8% and 2.2%, respectively, to revenue growth.
Healthy Liquidity Position: A robust liquidity position adds to the company’s strength. In the second quarter, its cash flow from operations totaled $112.7 million despite the increase in working capital of almost $33 million. Its cash and cash equivalents were $395.6 million, reflecting growth of 27.9% on a sequential basis. Exiting the second quarter, the company’s borrowing capacity was about $2.1 billion.
Estimate Revisions: In the past 30 days, analysts have increasingly become bullish on the company, as evident from positive earnings estimate revisions. The Zacks Consensus Estimate for its 2021 earnings has trended up from $8.08 to $8.37 on five upward estimate revisions versus one downward. Over the same timeframe, the consensus estimate for 2022 earnings has trended up from $9.17 to $9.69 on five upward estimate revisions against one downward.
Other Stocks to Consider
Some other top-ranked stocks from the same space are Kadant Inc. (KAI - Free Report) , EnPro Industries, Inc. (NPO - Free Report) and Dover Corporation (DOV - Free Report) . While Kadant and EnPro sport a Zacks Rank #1 (Strong Buy), Dover carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kadant delivered an earnings surprise of 22.26%, on average, in the trailing four quarters.
EnPro delivered an earnings surprise of 80.64%, on average, in the trailing four quarters.
Dover delivered an earnings surprise of 17.59%, on average, in the trailing four quarters.