A prudent investment decision involves buying stocks that have solid prospects and selling those that carry risks. At times, it is rational to hold certain stocks that have enough potential but are weighed down by tough market conditions.
Here we discuss about Delphi Technologies PLC (DLPH - Free Report) , a company that has an expected long-term earnings per share growth rate of 1.7%.
Factors Driving Delphi Technologies
Delphi Technologies has a geographically diverse revenue base. Region-wise, it derived 44% of revenues from Europe, the Middle East and Africa (EMEA), 28% from North America, 25% from the Asia Pacific and 3% from South America in third-quarter 2018.
Adjusted revenues increased 15% in South America, 5% in Europe and 3% in North America. While growth in Commercial Vehicle and GDi drive revenues from Europe, the same from North America is benefitting from program launches and increased sales to Commercial Vehicle customers.
Regional presence coupled with its diversified and innovative product portfolio with updated technologies makes Delphi Technologies a solid choice for original equipment manufacturers (OEMs). This is because OEMs are focused on increasing efficiency and expanding their global manufacturing footprint by choosing suppliers with global scale who can easily adapt to regional variations.
The company’s aftermarket business generates stable recurring revenues.
Despite significant growth prospects, the company faces its share of headwinds. Declining revenues in passenger car diesel and GDi continue to weigh on Delphi Technologies’ top line. A debt-laden balance sheet may limit the company’s future expansion and worsen its risk profile. However, we believe that vast global network and innovative product portfolio bode well for Delphi Technologies.
Zacks Rank & Stocks to Consider
Delphi Technologies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some other better-ranked stocks in the broader Zacks Business Services sector are Interpublic (IPG - Free Report) , Automatic Data Processing (ADP - Free Report) and Navigant Consulting (NCI - Free Report) , each carrying a Zacks Rank #2 (Buy). Long-term expected EPS (three to five years) growth rates for Interpublic, Automatic Data Processing and Navigant are 7.4%, 12.5% and 13.5%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>