Emerson Electric Co. (EMR - Free Report) recently unveiled its state-of-the-art gasketed and enclosed Light Emitting Diode (LED) luminaire — Appleton Contender LED. Taking the company’s operational efficiency, employee safety and lighting performance a notch higher, luminaire will likely bring maintenance and energy savings up to 65% in difficult low clearance areas like catwalks, tunnels, walkways and stairwells.
Inside the Headlines
So far, High-Intensity Discharge (HID) luminaires were used as the major light source in chemical processors, oil and gas facilities, and other hazardous locations. However, at the moment, Emerson’s latest LED luminaire is viewed as a more cost-effective solution than the existing HID luminaires offered by one its major rivals. The Appleton Contender LED is highly useful for retrofit applications and is equipped with unique accessories like a safety cable, angled reflector, globe guards and visor.
Additionally, it is authorized with Appleton Mercmaster LED Low Profile globes and offers rated illumination through its entire operating temperature range (-40° to +149° Fahrenheit), to ensure that the facilities are securely lit in hot or arctic cold temperature. Notably, it delivers secured lighting equivalent to 70-75 Watt HID luminaires.
What’s Troubling Emerson?
Emerson is poised to boost its competency on the back of stronger innovation and strategic acquisitions. Nonetheless, the stock currently carries an unfavorable Zacks Rank #4 (Sell).
The company expects that material price inflation (on account of tariffs over U.S. imports) will escalate its aggregate costs and in turn, dampen profitability in the quarters ahead. Moreover, a stronger U.S. dollar is anticipated to weigh over its overseas revenue performance in fiscal 2019 (ending September 2019). Also, we notice that Emerson’s cash position has been weakening, of late. In the last six years (2013-2018), its cash and cash equivalents went down 16.7% (CAGR).
Over the past month, Emerson’s shares have lost 3%, wider than the 2.1% loss recorded by the industry it belongs to.
In addition, the stock looks overvalued compared with its industry on a P/E (TTM) basis, with the respective tally of 22.4x and 17.5x, for the same time period.
Stocks to Consider
Some better-ranked stocks in the Zacks Industrial Products sector are listed below:
Enersys (ENS - Free Report) sports a Zacks Rank #1 (Strong Buy), currently. The company pulled off a positive average earnings surprise of 2.83% in the past four quarters.
Atkore International Group Inc. (ATKR - Free Report) also flaunts a Zacks Rank of 1. The company generated a positive average earnings surprise of 24.46% over the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Rexnord Corporation (RXN - Free Report) carries a Zacks Rank #2 (Buy), at present. The company delivered a positive average earnings surprise of 17.71% during the same time frame.
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