Sun Hydraulics Corporation currently seems to be a smart choice for investors seeking exposure in the machinery space. The company’s fundamentals are strong. Further, its upwardly revised earnings estimates made it more lucrative.
This Sarasota, FL-based company currently sports a Zacks Rank #1 (Strong Buy). It belongs to the Zacks Manufacturing – General Industrial industry, within the broader Zacks Industrial Products sector. We believe that the strengthening housing market, infrastructural development, lower taxes (due to the implementation of the U.S. Tax Cuts and Jobs Act), solid manufacturing activities and other tailwinds are aiding the sector.
Below we discussed why investing in Sun Hydraulics (it runs business under the name, Helios Technologies) will be a smart choice for investors.
Share Price Performance, Impressive Earnings Outlook: Market sentiments seem to be working in favor of Sun Hydraulics over time. In the past three months, the company’s shares have increased 42.8% compared with the industry’s growth of 17.8%.
It is worth mentioning here the company delivered positive earnings surprise of 40% in the last quarter, with earnings of 56 cents per share surpassing the Zacks Consensus Estimate of 40 cents. Notably, its share price gained roughly 30%, following the release of fourth-quarter 2018 results on Feb 25, 2019.
For 2019, Sun Hydraulics anticipates gaining from growth investments, solid product portfolio and focus on driving operational excellence. It anticipates non-GAAP earnings per share of $2.55-$2.65, reflecting year-over-year growth of 11-15%. Also, adjusted earnings before interest, taxes, depreciation and amortization margin are predicted to improve to 24.5-25.5%.
In the past 60 days, earnings estimates for 2019 have been revised upward by six brokerage firms and increased by four for 2020. Currently, the Zacks Consensus Estimate for earnings is pegged at $2.60 for 2019 and $2.90 for 2020, reflecting growth of 23.2% and 18.4% from the respective 60-day-ago tallies.
Sun Hydraulics Corporation Price and Consensus