On Jan 11, Zacks Investment Research upgraded industrial goods
) to a Zacks Rank #3 (Hold) largely on the back of strong
Ingersoll's share price has steadily been on an uptrend since
mid-2013. The stock hit a 52-week high of $62.89 on Jan 10, 2014,
before closing the trading session a notch lower at $62.65 for a
healthy year-over-year return of 57.7%. Despite its strong price
appreciation, Ingersoll still has the wherewithal for the stock
to climb up. The stock is currently trading at a forward P/E of
19.3x and has long-term earnings growth expectation of 15.0%.
Why the Upgrade?
On Dec 2, Ingersoll completed the spin-off of its commercial and
residential security businesses into a separate standalone
company. Ingersoll will not have any stake in this new company,
which has been listed on New York Stock Exchange as
). Ingersoll shareholders received one Allegion share for every
three Ingersoll shares held at the close of business as of the
record date of Nov 22, 2013.
The spin-off is expected to unlock value for the company's
shareholders. With the spin-off, Ingersoll will be able to
strengthen its focus on core businesses. The restructuring
initiative is aimed at driving its growth initiative,
implementing a new business operating system and reducing
complexity and overhead cost to improve margins.
On Oct 18, the company delivered solid third-quarter 2013 results
beating the Zacks Consensus Estimate on both revenues and
earnings. Adjusted earnings stood at $1.16, beating the Zacks
Consensus Estimate by 7.4%. Quarterly revenues of $3,749 million
beat the Zacks Consensus Estimate of $3,727 million and rose 4%
year over year. All the four segments of the company reported
year-over-year growth in revenues.
Over the last 7 days, the earnings estimates for Ingersoll did
not show any upward or downward revision for 2013 and 2014.
Despite the lack of estimate revisions, we anticipate an uptrend
for the stock backed by its strong growth potential.
Other Stocks to Consider
Players in the industry worth reckoning include
Altra Industrial Motion Corp.
), each carrying a Zacks Rank #2 (Buy).
ALTRA HOLDINGS (AIMC): Free Stock Analysis
GRACO INC (GGG): Free Stock Analysis Report
INGERSOLL RAND (IR): Free Stock Analysis
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