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.
Snap-on Buys Power Hawk to Expand in Critical Industries
Read MoreHide Full Article
Snap-on Incorporated (SNA - Free Report) recently acquired Rockaway, NJ-based Power Hawk Technologies, Inc., alias, Power Hawk, for a cash outlay of about $8 million. The buyout is expected to reinforce the company’s capabilities while providing solutions to make tasks simpler for serious professionals.
Power Hawk is the manufacturer and distributor of rescue tools and equipment that serves military, governmental, fire and emergency purposes. As a result, Snap-on will be able to increase its competency to serve critical industries in military and emergency operations.
Notably, Power Hawk will form part of Snap-on’s Commercial & Industrial Group segment. We note that this segment has been displaying significant strength since past few quarters now. In fourth-quarter 2018, sales at the division increased 0.6% with organic sales growth of 3.5%. Organic sales benefited from double-digit sales growth in both the Asia Pacific operations and specialty tools business along with higher sales to customers in critical industries and low single-digit growth in European-based hand tools business.
Sales in the Asia Pacific region reflected strength in India and across Southeast Asia more than offsetting the lower sales in China. Further, the company is witnessing significant progress in critical industries driven by strong activity in aviation and general industry. We expect the latest acquisition to contribute to the Commercial & Industrial Group’s strength, thus driving the company’s overall sales and profitability.
However, shares of this global provider of professional tools and related solutions have gained 4.2% in the past three months, underperforming the industry’s 11.4% rally. This underperformance might be attributed to Snap-on’s soft sales surprise as the top line missed estimates for the third straight quarter in the most recent quarter. Also, the company is witnessing sluggishness in its Tools Group segment, which is being hurt by lower sales at its International franchise business.
Nevertheless, Snap-on’s efforts to revive performance at the Tools Group division are encouraging. The company expects to leverage its capabilities in the automotive repair area besides strengthening the overall professional customer base. Apart from automotive repair, it expects to add customers from adjacent markets, newer geographies and other areas like critical industries. Moreover, this Zacks Rank #3 (Hold) company is gaining from a robust business model that helps in enhancing the value-creation processes. This, in turn, improves safety, quality of service, customer satisfaction and innovation.
Want Better-Ranked Consumer Discretionary Stocks? Check These
G-III Apparel Group, Ltd. (GIII - Free Report) , also a Zacks Rank #1 stock, has a long-term earnings growth rate of 15%.
Ralph Lauren Corporation (RL - Free Report) carries a Zacks Rank #2 (Buy). It has a long-term earnings growth rate of 10.3%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
Image: Bigstock
Snap-on Buys Power Hawk to Expand in Critical Industries
Snap-on Incorporated (SNA - Free Report) recently acquired Rockaway, NJ-based Power Hawk Technologies, Inc., alias, Power Hawk, for a cash outlay of about $8 million. The buyout is expected to reinforce the company’s capabilities while providing solutions to make tasks simpler for serious professionals.
Power Hawk is the manufacturer and distributor of rescue tools and equipment that serves military, governmental, fire and emergency purposes. As a result, Snap-on will be able to increase its competency to serve critical industries in military and emergency operations.
Notably, Power Hawk will form part of Snap-on’s Commercial & Industrial Group segment. We note that this segment has been displaying significant strength since past few quarters now. In fourth-quarter 2018, sales at the division increased 0.6% with organic sales growth of 3.5%. Organic sales benefited from double-digit sales growth in both the Asia Pacific operations and specialty tools business along with higher sales to customers in critical industries and low single-digit growth in European-based hand tools business.
Sales in the Asia Pacific region reflected strength in India and across Southeast Asia more than offsetting the lower sales in China. Further, the company is witnessing significant progress in critical industries driven by strong activity in aviation and general industry. We expect the latest acquisition to contribute to the Commercial & Industrial Group’s strength, thus driving the company’s overall sales and profitability.
However, shares of this global provider of professional tools and related solutions have gained 4.2% in the past three months, underperforming the industry’s 11.4% rally. This underperformance might be attributed to Snap-on’s soft sales surprise as the top line missed estimates for the third straight quarter in the most recent quarter. Also, the company is witnessing sluggishness in its Tools Group segment, which is being hurt by lower sales at its International franchise business.
Nevertheless, Snap-on’s efforts to revive performance at the Tools Group division are encouraging. The company expects to leverage its capabilities in the automotive repair area besides strengthening the overall professional customer base. Apart from automotive repair, it expects to add customers from adjacent markets, newer geographies and other areas like critical industries. Moreover, this Zacks Rank #3 (Hold) company is gaining from a robust business model that helps in enhancing the value-creation processes. This, in turn, improves safety, quality of service, customer satisfaction and innovation.
Want Better-Ranked Consumer Discretionary Stocks? Check These
lululemon athletica inc. (LULU - Free Report) has an impressive long-term earnings growth rate of 18% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
G-III Apparel Group, Ltd. (GIII - Free Report) , also a Zacks Rank #1 stock, has a long-term earnings growth rate of 15%.
Ralph Lauren Corporation (RL - Free Report) carries a Zacks Rank #2 (Buy). It has a long-term earnings growth rate of 10.3%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>