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Gorman-Rupp (GRC) is Now a Strong Buy: Should You Add?
Zacks Investment Research upgraded Gorman-Rupp Co. (GRC - Free Report) to a Zacks Rank #1 (Strong Buy) on Aug 23, 2016. Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of outperforming the broader market in the near term.
Why the Upgrade?
Market sentiments have been favoring Gorman-Rupp since the beginning of 2016 as evident from the 3.4% rise in the company’s share price to date. Also, the company’s financial performance in three out of past four quarters has been impressive, with an average positive earnings surprise of 10.08%.
Last quarter, Gorman-Rupp’s earnings of 25 cents per share exceeded the Zacks Consensus Estimate of 22 cents by 13.6%, while it came in line with the year-ago tally. The adverse impact of 7.3% fall in revenues was partially offset by decrease in cost of sales and operating expenses.
For 2016, Gorman-Rupp anticipates benefitting from its cost-savings strategies and efforts to improve operational efficiency. Also, a solid balance sheet will make acquisitions an attractive option for growth while new product innovation and launches will help boost top line. Impressive results and outlook have made investors optimistic about the company’s prospects. Over the last 60 days, the Zacks Consensus Estimate for the stock grew 5.6% to 95 cents for 2016 and by 5% to $1.05 for 2017. For third-quarter 2016, the Zacks Consensus Estimate increased 4.2% to 25 cents per share.
GORMAN RUPP CO Price and Consensus
GORMAN RUPP CO Price and Consensus | GORMAN RUPP CO Quote
Other Stocks to Consider
Gorman-Rupp Co. currently has a $721 million market capitalization. Other stocks worth mentioning in the machinery industry include DXP Enterprises, Inc. (DXPE - Free Report) , Tennant Company (TNC - Free Report) and Illinois Tool Works Inc. (ITW - Free Report) . While both DXP Enterprises and Tennant Company sport the same Zacks Rank as Gorman-Rupp, Illinois Tool Works carries a Zacks Rank #2 (Buy).
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