Industrial Products is currently one of the favored sectors — occupying the sixth position — among the 16 Zacks sectors. It yielded 9.1% return in the past year.
It's worth noting here that the sector's earnings are predicted to increase 24.3% in 2018 on revenue growth of 9.5%. Of many indicators, few supporting the sector's growth are discussed below:
Prospering global economy, as well as advancing U.S. economy — predicted to grow 2.9% in 2018 by the International Monetary Fund — supports growth of the sector. Also, a healthy demand for U.S.-made machinery, expanding manufacturing sector and healthy job market is a boon. Industrial production is also growing impressively — a 4.2% growth has been recorded in July.
Investors interested in gaining exposure in the sector may choose stocks that have Zacks Rank #1 (Strong Buy) or #2 (Buy). Of many investment-friendly options, we believe that adding Altra Industrial Motion Corp. (AIMC - Free Report) to the portfolio will be a smart choice. The stock currently sports a Zacks Rank #1 and has a favorable VGM Score of A.
Let's delve deeper and discuss why Altra Industrial Motion is a suitable investment option.
Bottom-Line Performance & Projections: Altra Industrial Motion's financial performance has remained better than expected in three out of the last four quarters. Average earnings surprise is a positive 4.01%. This average includes the impact of 7.58% earnings beat recorded in the second quarter of 2018. On a year-over-year basis, the company's bottom line in the second quarter increased 24.6% on the back of sales and margin improvement.
For 2018, Altra Industrial Motion anticipates gaining from solid organic sales growth opportunities, strengthening industrial economy, and business combination with Fortive Corporation's (FTV - Free Report) Automation and Specialty business. It increased its earnings per share (non-GAAP) guidance from $2.36-$2.49 expected earlier to $2.45-$2.55.
Driven by solid performance and impressive outlook, earnings estimates on the company have been increased in the past 60 days. Currently, the Zack Consensus Estimate for earnings is pegged at $2.54 for 2018 and $2.88 for 2019, reflecting growth of 2.8%, and 2.5% from the respective 60-day-ago tallies.
Altra Industrial Motion Corp. Price and Consensus