Zacks Investment Research upgraded Kadant Inc. (KAI - Free Report) to a Zacks Rank #1 (Strong Buy) on Nov 4, 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 Kadant Inc. since the beginning of 2016, as evident from the 29.3% rise in the company’s share price to date. Also, the company’s financial performance in last four quarters has been impressive, with a positive average earnings surprise of 27.67%.
In third-quarter 2016, Kadant Inc’s earnings of 81 cents per share surpassed the Zacks Consensus Estimate of 64 cents while revenues grew 15% year over year. Sales growth for the Doctoring, Cleaning, & Filtration and Fluid-Handling product lines grew on organic initiatives, while that for the Stock-Preparation product line was driven by acquisition gains.
On the back of its organic and inorganic growth initiatives as well as its performance in the first nine months of 2016, Kadant Inc. has increased its adjusted earnings guidance to $2.99−$3.05 per share from the previous projection of $2.98−$3.04.
Impressive results and outlook have made investors optimistic about Kadant Inc’s prospects. Over the last 30 days, the Zacks Consensus Estimate for the stock increased 0.7% to $3.03 for 2016.
Other Stocks to Consider
Kadant Inc. currently has a market capitalization of $572 million. Other stocks worth mentioning in the machinery industry include Applied Industrial Technologies, Inc. (AIT - Free Report) , AO Smith Corp. (AOS - Free Report) and Schneider Electric SE (SBGSY - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies’ earnings estimates for fiscal 2017 and fiscal 2018 have been revised upward over the last 60 days. Average earnings surprise for the last four quarters is a positive 4.93%.
AO Smith Corp. reported better-than-expected results in the last four quarters, with a positive average earnings surprise of 5.88%. Also, bottom-line expectations for 2016 and 2017 have improved over the past 60 days.
Schneider Electric SE’s earnings estimates for 2017 represent a year-over-year growth of 4.65%.
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