Shares of Altra Industrial Motion Corp. (AIMC) touched a new 52-week high of $35.01 during the trading session on Jan 7. This is an increase over the previous high of $34.54 reached on Dec 31.
Shares of Altra Industrial closed at $34.94 at the end of trading on Jan 7, reflecting a solid year-to-date return of 55.6%. The volume of shares traded during that session was 0.30 million. Further upside potential exists for this Zacks Rank #1 (Strong Buy) industrial electrical equipment maker, as reflected in the projected earnings growth rate of 15.0% for the next five years and positive revisions in earnings estimates for 2014.
Growth Drivers
Shares of Altra Industrial have risen by roughly 8.1% since the company announced the completion of the acquisition of Svendborg Brakes A/S and S.B. Patent Holding ApS, a leading global manufacturer of premium quality caliper brakes, on Dec 17, 2013.
The acquired assets are expected to complement Altra Industrial’s clutches and brakes business and enable the company to expand its operations in Europe, China, South America, South Africa and Australia. The scope for expansion in the energy and mining industry will also be widened.
From a financial perspective, the acquisition will be accretive to earnings in the range of 10–15 cents per share in 2014. Taking into account the acquisition, management of Altra Industrial expects sales in the range of $790–$820 million and earnings per share in the range of $1.80–$1.95 in 2014.
Besides the acquisition, a look into Altra Industrial’s third quarter 2013 results indicates that the company is performing well financially. Earnings per share in the third quarter were 40 cents, up 17.6% year over year while revenues increased 0.5% to $175 million. The bottom line surpassed the Zacks Consensus Estimate by 8.1%. Altra Industrial has delivered a positive 13.1% average earnings surprise in the trailing four quarters.
Estimate Revisions Show Potency
Over the last 30 days, the Zacks Consensus Estimate for Altra Industrial has advanced 1.0% to $1.95 for 2014. This represents year-over-year growth of 19.6%. Moreover, Earnings ESP for the company is currently at +11.3% for 2014, indicating high chances of a robust performance this year.
Altra Industrial currently has a market capitalization of $942.3 million. Other stocks worth considering in the industry include Middleby Corp. (MIDD), JinkoSolar Holding Co., Ltd. (JKS) and Arotech Corporation (ARTX). While Middleby and JinkoSolar carry a Zacks Rank #1 (Strong Buy), Arotech holds a Zacks Rank #2 (Buy).
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