For the first time
Altra Industrial Motion Corp.
) has announced a share repurchase program. The company will buy
back up to $50 million worth of shares through Dec 2016.
This proclamation goes in line with Altra Industrial's strategy to
continue rewarding its shareholders. The company had announced a
20% hike in its quarterly cash dividend to 12 cents per share
earlier in Apr 2014. The dividend will be paid on Jul 2 to the
shareholders of record as on Jun 18.
We believe that Altra Industrial's enhanced capital deployment
activities indicate a strong balance sheet. As of Mar 31, 2014, the
company had cash and cash equivalents of $61.8 million, compared
with $63.6 million as of Dec 31, 2013. Further, long-term debt at
the end of the first quarter stood at $249.1 million, down from
$261.3 million at the end of fourth-quarter 2013.
Further, Altra Industrial also continues to expand globally. It
acquired Denmark-based Svendborg Brakes A/S for cash consideration
of nearly €74.7 million ($102.7 million) in Dec 2013.
Going ahead, management expects its cost-control initiatives to aid
bottom-line growth. Further, Altra Industrial's share repurchase
plan will boost investors' confidence in the stock. Though the
company faces headwinds owing to sluggish economic recovery, we
believe that a strong balance sheet position and diversified
footprints will somewhat mitigate the adverse impact.
Altra Industrial currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks worth considering in the industry include
Illinois Tool Works Inc.
Blount International Inc.
). All these hold a Zacks Rank #2 (Buy).
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