) hit a 52-week high of $26.18 during yesterday's trading
session. However, the stock closed lower at $25.92, reflecting a
solid year-over-year increase of 23.2%. The average trading
volume for the last three months aggregated 958,744 shares.
Despite its strong price appreciation, this Zacks Rank #2
(Buy) stock still has enough potential to move upward. Its
long-term EPS growth expectation of 11.6% and a market cap of
$59.95 billion are some of the catalysts driving the stock.
ABB has been witnessing rising earnings estimates on the back
of recent strategic acquisitions, modest third-quarter 2013
earnings, new contract wins, strong backlog and divestiture of
its non-performing assets.
On Oct 25, the company reported modest third-quarter 2013
results with earnings increasing 9.1% year over year, primarily
driven by the execution of its strong order backlog. The
company's top-line also rose 9% year over year. Its cash from
operations stood at $1.2 billion compared with $768 million in
the prior-year quarter.
Recently, ABB announced the completion of the sale of its
Baldor's generator-set business to Generac Holdings Inc. The
divestiture is expected to be a win-win situation for both ABB's
Baldor Electric and Generac. Through the sale of the
generator-set division, Baldor Electric will primarily focus on
industrial electric motors and mechanical power transmission
products, which are in line with ABB's core portfolio.
In addition, the company won a number of strategic deals that
include developing grid connection and providing supporting
infrastructure for U.K.-based Vattenfall's Pen y Cymoedd Wind
Energy Project, a $23 million marine contract and a long-term
service agreement from Queensland Curtis Liquefied Natural
ABB maintains a positive long-term outlook. Rising investments
in grid upgrades along with increased spending on automation
solutions to boost energy efficiency and productivity are
benefactors for the company.
Over the last 7 days, the earnings estimates did not show any
upward or downward revision for 2013. Although there is a lacuna
of estimate revisions, we envision an uptrend for the stock
backed by its strong growth potential.
Other Stocks to Consider
Other stocks in the industry that look promising at the moment
Pioneer Power Solutions, Inc.
AO Smith Corp.
). All three stocks carry a Zacks Rank #1 (Strong Buy).
ABB LTD-ADR (ABB): Free Stock Analysis Report
SMITH (AO) CORP (AOS): Free Stock Analysis
ENERSYS INC (ENS): Free Stock Analysis Report
PIONEER PWR SOL (PPSI): Get Free Report
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