Shares of Ametek Inc. AME hit a new 52-week high of $55.60 on Jul 1, eventually closing at $55.50. The company returned 4.4% in the past one year and roughly 5.5% year-to-date. Average volume of shares traded over the last three months was roughly 1,024K.
What is Driving Ametek?
Ametek manufactures and sells electronic instruments and electromechanical devices. The company’s strong execution, global market expansion, investments in product development and strategic acquisitions should boost growth. The strong business portfolio is another growth driver.
The price appreciation may also be attributed to Ametek’s recent agreement to acquire Cognex Corporation’s CGNX Surface Inspection Systems Division (SISD) for approximately $160 million. Cognex’s SISD business develops and manufactures high-speed defect recognition technology that processes and analyzes surfaces of constantly processed materials to detect flaws.
This buyout will extend Ametek's high-precision manufacturing capabilities to serve customers in the Electronic Instruments Group business. Through this the company will be able to offer improved product offerings and increase market share, thereby expanding the customer base.
Moreover, the company gained momentum from strong fundamentals and better-than-expected first-quarter 2015 results reported on Apr 29. Since then, the stock has moved up 6.1%.
Ametek’s top line increased 0.9% from the year-ago period to $984.1 million. Also, non-GAAP earnings of 63 cents per share came in line with the Zacks Consensus Estimate and were at the higher end of management's guidance. Earnings remained flat sequentially but increased 10.8% on a year-over-year basis. Strong operating performance primarily led to the year-over-year earnings growth.
For second-quarter 2015, Ametek projects revenues to be more or less flat year over year. Earnings per share are expected within 63 cents to 64 cents, representing 3% to 5% year-over-year growth. The relatively better bottom-line projection further indicates that the company’s growth momentum is likely to continue.
Additionally, Ametek has delivered an average earnings surprise of nearly 1.66% over the trailing four quarters. The company’s strong revenue growth, solid financial conditions, increasing market share and strong long-term growth potential position it favorably.
Ametek currently has a Zacks Rank #2 (Buy). A couple of well-ranked stocks in the same space are Teradyne Inc. TER and Silver Spring Networks, Inc. SSNI. Both the stocks carry the same Zacks Rank as Ametek.
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