Shares of industrial goods manufacturer IDEX Corporation (IEX) scaled a 52-week high of $80.64 on Jun 20, before closing the trading session a notch lower at $80.05 for a healthy one-year return of 55.6%. Barring minor hiccups, IDEX’s share prices have steadily been on an uptrend from Jun 2013.
Despite its strong price appreciation, this Zacks Rank #2 (Buy) stock has the wherewithal to continue its growth curve. The stock is currently trading at a forward P/E of 23.3x and has long-term earnings growth expectation of 14.3%.
Growth Drivers
IDEX recently acquired valve products manufacturer Aegis Flow Technologies for $26 million cash. Aegis is an established player in engineering, manufacturing and marketing of specialty chemical processing valves. Its products enhance safety and streamline costs by achieving reduction in fugitive emissions and process downtime while cutting back annual maintenance and capital expenditures.
With annual revenues of $15 million, this LA-based company serves a wide range of industries like chemical, pharmaceutical, semiconductor and pulp/paper. Post-acquisition, Aegis formed an integral part of IDEX’s Fluid & Metering Technologies segment, offering deep technological expertise to the latter’s Chemical, Food & Process platform.
In order to better serve its customers, IDEX has also sharpened its focus on the market segments that offer the greatest opportunity for long-term growth and on the critical few customers who will drive that growth. The company has consolidated similar product lines and has built definite product-line strategies to drive growth and profitability.
Moving forward, the company is diligently focusing on developing talented global teams that are committed to IDEX Operating Model for an effective execution of its operational plans. IDEX also remains bullish about its top- and bottom-line growth and expects earnings to be up 8.0%–11.0% in 2014 compared to the previous year. The current Zacks Consensus Estimate for 2014 is pegged at $3.44, which represents year-over-year growth of 11.3%.
Other Stocks to Consider
Stocks in the industry that warrant a look include Blount International Inc. (BLT), Illinois Tool Works Inc. (ITW) and Nordson Corporation (NDSN), each carrying a Zacks Rank #2 (Buy).
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