We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Watts Water (WTS) is a Must-Add Stock to Your Portfolio?
Read MoreHide Full Article
Shares of Watts Water Technologies, Inc. (WTS - Free Report) have been performing well, of late. The company’s shares have rallied around 20% over the past six months driven by continued focus on productivity increment and product innovation. We believe this is the right time to add the stock as the company has bright prospects and is poised to maintain its bullish momentum.
Let’s delve deeper into the factors that make this maker of water safety and flow control products an attractive investment option.
What Makes Watts Water an Attractive Pick?
Solid Rank & VGM Score: Watts Water currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities. Thus, the company appears to be a potential investment proposition at the moment.
Above the Industry: Watts Water has outperformed the industry it belongs to over the past year. The company’s shares have jumped 30% compared with roughly 19% growth recorded by the industry during the same time frame.
Positive Earnings Surprise History: Watts Water has an impressive earnings surprise history. It outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average positive earnings surprise of 4.00%.
Positive Estimate Revisions, Growth Projections: The Zacks Consensus Estimate for 2018 and 2019 has gone up nearly 6% and around 1.8%, respectively, over the past 30 days. The Zacks Consensus Estimate for 2018 earnings is currently pegged at $3.63 which reflects year-over-year growth of 20%. The Zacks Consensus Estimate for 2019 earnings is pegged at $3.97, reflects year-over-year growth of 9.4%.
Watts Water has a long-term expected earnings per share growth of 12%.
Strong Q4 and Upbeat Outlook: Watts Water topped earnings and revenue expectations in fourth-quarter 2017. Its adjusted earnings rose 16% from the year-ago quarter to 74 cents per share and surpassed the Zacks Consensus Estimate by a penny. Revenues also went up around 7% year over year to $366 million and beat the Zacks Consensus Estimate of $364 million.
For 2018, Watts Water expects that its organic sales will increase approximately 3%. In the Americas segment, revenues will grow organically in the range of 3-5% in 2018, with solid growth across most of its product lines. Furthermore, the company predicts organic sales growth in the range of 1-3% in Europe segment for the full year on improved performance in fluid solutions and drainage product lines. In the Asia-Pacific segment, Watts Water anticipates organic sales to grow between 7% and 10% for the year, with strong growth both inside and outside of China.
In addition, Watts Water estimates its consolidated operating margin will expand in the range of 50-70 basis points in 2018 driven by higher volume and continued productivity-increment efforts, including restructuring savings. The company continues to reinvest a portion of productivity savings in selling and marketing, R&D and IT systems to fund near-term growth.
Growth Drivers in Place: Watts Water is poised to benefit from the successful completion of its transformation efforts. The company has started to realize the expected benefits of portfolio rationalization, footprint optimization and global sourcing while simultaneously reinvesting for future growth. With the completion of these, the company will now focus on driving growth through new product development, geographic expansion and key account management. These initiatives are anticipated to be conducive to top-line growth and margin expansion in 2018.
Notably, the company remains focused on investment in sales and marketing, and R&D to roll out fresh products. It witnessed success in 2017 in underpenetrated regions, like Korea and Latin America, on the back of products like IntelliStation, SmartSense and Benchmark Platinum. These have originated from the company’s product-development initiatives which will stoke growth.
Badger Meter has a long-term earnings growth rate of 15.3%. Its shares have rallied 37.5%, over the past year.
AMETEK has a long-term earnings growth rate of 11.5%. The company’s shares have been up 44.6% during the same time frame.
Transcat has a long-term earnings growth rate of 8%. The stock has gained 22% in a year’s time.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away. Download the new report now>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Why Watts Water (WTS) is a Must-Add Stock to Your Portfolio?
Shares of Watts Water Technologies, Inc. (WTS - Free Report) have been performing well, of late. The company’s shares have rallied around 20% over the past six months driven by continued focus on productivity increment and product innovation. We believe this is the right time to add the stock as the company has bright prospects and is poised to maintain its bullish momentum.
Let’s delve deeper into the factors that make this maker of water safety and flow control products an attractive investment option.
What Makes Watts Water an Attractive Pick?
Solid Rank & VGM Score: Watts Water currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities. Thus, the company appears to be a potential investment proposition at the moment.
Above the Industry: Watts Water has outperformed the industry it belongs to over the past year. The company’s shares have jumped 30% compared with roughly 19% growth recorded by the industry during the same time frame.
Positive Earnings Surprise History: Watts Water has an impressive earnings surprise history. It outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average positive earnings surprise of 4.00%.
Positive Estimate Revisions, Growth Projections: The Zacks Consensus Estimate for 2018 and 2019 has gone up nearly 6% and around 1.8%, respectively, over the past 30 days. The Zacks Consensus Estimate for 2018 earnings is currently pegged at $3.63 which reflects year-over-year growth of 20%. The Zacks Consensus Estimate for 2019 earnings is pegged at $3.97, reflects year-over-year growth of 9.4%.
Watts Water has a long-term expected earnings per share growth of 12%.
Strong Q4 and Upbeat Outlook: Watts Water topped earnings and revenue expectations in fourth-quarter 2017. Its adjusted earnings rose 16% from the year-ago quarter to 74 cents per share and surpassed the Zacks Consensus Estimate by a penny. Revenues also went up around 7% year over year to $366 million and beat the Zacks Consensus Estimate of $364 million.
For 2018, Watts Water expects that its organic sales will increase approximately 3%. In the Americas segment, revenues will grow organically in the range of 3-5% in 2018, with solid growth across most of its product lines. Furthermore, the company predicts organic sales growth in the range of 1-3% in Europe segment for the full year on improved performance in fluid solutions and drainage product lines. In the Asia-Pacific segment, Watts Water anticipates organic sales to grow between 7% and 10% for the year, with strong growth both inside and outside of China.
In addition, Watts Water estimates its consolidated operating margin will expand in the range of 50-70 basis points in 2018 driven by higher volume and continued productivity-increment efforts, including restructuring savings. The company continues to reinvest a portion of productivity savings in selling and marketing, R&D and IT systems to fund near-term growth.
Growth Drivers in Place: Watts Water is poised to benefit from the successful completion of its transformation efforts. The company has started to realize the expected benefits of portfolio rationalization, footprint optimization and global sourcing while simultaneously reinvesting for future growth. With the completion of these, the company will now focus on driving growth through new product development, geographic expansion and key account management. These initiatives are anticipated to be conducive to top-line growth and margin expansion in 2018.
Notably, the company remains focused on investment in sales and marketing, and R&D to roll out fresh products. It witnessed success in 2017 in underpenetrated regions, like Korea and Latin America, on the back of products like IntelliStation, SmartSense and Benchmark Platinum. These have originated from the company’s product-development initiatives which will stoke growth.
Other Stocks to Consider
Some other top-ranked stocks in the same sector are Badger Meter, Inc. (BMI - Free Report) , AMETEK, Inc. (AME - Free Report) and Transcat, Inc. (TRNS - Free Report) . While Badger Meter sports a Zacks Rank #1, AMETEK and Transcat carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Badger Meter has a long-term earnings growth rate of 15.3%. Its shares have rallied 37.5%, over the past year.
AMETEK has a long-term earnings growth rate of 11.5%. The company’s shares have been up 44.6% during the same time frame.
Transcat has a long-term earnings growth rate of 8%. The stock has gained 22% in a year’s time.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>