Shares of Milacron Holdings Corp. MCRN dipped to a 52-week low of $13.07 on Dec 7. However, the stock closed a tad higher at $13.37, losing 3.95% in a day.
Cincinnati, OH-based Milacron Holdings makes engineered and customized systems within the plastic technology and processing industry in North America, Europe, Asia, and internationally. Its common stock began trading on the NYSE on Jun 25, 2015.
What’s Taking it Down?
Milacron Holding’s share price has been witnessing a downward trend since the company reported weak third-quarter results on Nov 6. Reported adjusted earnings per share were at 38 cents, which declined 3% year over year and also fell short of the Zacks Consensus estimate of 41 cents.
Milacron Holdings posted revenues of $292.7 million, which declined 7% year over year and missed the Zacks Consensus Estimate of $318 million. Milacron Holdings expects to deliver organic revenue growth in the range of 2% to 3% for 2015. This is lower than its long-term growth target of 5%.
Milacron Holdings experienced softness in orders in the third quarter, particularly in North America and China. Even though the flow of potential customer projects remains positive, some major capital decisions are clearly being deferred by customers, as they assess their own demand trends. As Milacron Holdings caters to diverse end-markets, demand will continue to be affected by cyclical trends in client capital expenditures, industrial production and construction activity. Further, free cash flow will be constrained by higher working capital needs and the capital investment required for restructuring its European manufacturing footprint. Moreover, risks related to operational execution as a public company, and the current challenging demand environment persist.
Milacron currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the sector include Albany International Corp. AIN, Codexis, Inc. CDXS and CUI Global, Inc. CUI. All of these stocks carry a Zacks Rank #1 (Strong Buy).
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