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Why Should You Hold on to Lindsay (LNN) Stock Right Now?

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Stabilization in the U.S. irrigation equipment market, backed by increasing demand for food stemming from rising population, favorable government policies on agricultural machinery and increasing adoption of precision farming will likely continue to support farm machinery stocks. Keeping this in mind, we have selected Lindsay Corporation (LNN - Free Report) for your consideration.

A positive trend in estimate revisions reflects optimism over the company’s earnings bright prospects. In the past 90 days, the Zacks Consensus Estimate moved up 4% to $2.26 for fiscal 2017 and 3.8% to $3.06 for fiscal 2018. Lindsay currently carries a Zacks Rank #3 (Hold).

Year to date, the company has outperformed the industry it belongs to. The stock has gained 23.3%, while the industry recorded growth of 18.9%.



Here’s what might drive the stock higher and why investors should hold on to the stock.

Positive Earnings Surprise History

Lindsay outpaced the Zacks Consensus Estimate in three of the trailing four quarters, generating a positive average earnings surprise of 3.29%.

Lindsay Corporation Price, Consensus and EPS Surprise

 

Lindsay Corporation Price, Consensus and EPS Surprise | Lindsay Corporation Quote

Return on Assets (ROA)

Lindsay currently has a ROA of 4.97%, while the industry's ROA is 3.03%. An above-average ROA denotes that the company is generating earnings by effectively managing assets.



Value Growth Momentum (VGM) Score

In aggregate, Lindsay currently has a Zacks VGM Score of B. Here V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three scores (Value - B, Growth - A, Momentum - B). Such a score allows you to eliminate the negative aspects of stocks and select winners. The VGM Score of B, along with some other key metrics, makes the company a solid choice for investors.

Acquisitions to Drive Growth

Lindsay continues to recognize benefits from the water-related acquisitions completed over the past few years. These acquisitions helped the company boost its gross margins, provided incremental revenue and profits derived from non-agricultural markets, as well as delivered platforms for future growth. Further, Lindsay’s acquisition of Elecsys Corporation is a strategic addition to the company’s long-term goal of leading the market in advanced technologies for managing water-usage efficiency. This acquisition will likely contribute to the development of Lindsay’s technology platform, as well as improve cost and quality of electronic technologies.

Bottom Line

Investors might want to hold on to the stock at present as it has ample prospects for outperforming peers in the near future.

Stocks to Consider

Some better-ranked stocks in the same sector include AGCO Corporation (AGCO - Free Report) , Terex Corporation (TEX - Free Report) and EnPro Industries, Inc. (NPO - Free Report) . All three stocks flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

AGCO has an expected long-term earnings growth rate of 13.5%.

Terex has an expected long-term earnings growth rate of 19.7%.

EnPro Industries has an expected long-term earnings growth rate of 15.9%.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

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