The Middleby Corporation
) recently announced that its management has approved a
three-for-one split for the company stocks. With a two-for-one
stock split executed on Jun 18, 2007, this is the second spilt in
the company's history.
Middleby will distribute two additional shares for each share
held by shareholders of record as of Jun 16, 2014. The split,
effected by distributing stock dividends, will take place on Jun 26
this year. Post the split, the number of outstanding shares will
increase from approximately 19 million to 57 million.
The strength of Middleby's business model is reflected in its
strong cash generation capabilities and commitment to enhance
shareholders value. The share price is expected to become much
lower than the current value as a stock split does not alter the
value of a company.
The split comes after strong results for the first quarter of
2014 announced on May 7, with earnings of $1.78 per share, up 28%
year over year. Further, revenues increased roughly 14% year over
year to $372.5 million, primarily due to sound contribution from
acquisitions. Continuing the spree, the company has acquired
Processing Equipment Solutions post the first-quarter-end.
Middleby is optimistic of recording higher sales on the back of
organic as well as inorganic growth. The company is launching over
50 products, to be available by the end of this year. In such an
upbeat situation, a stock split is anticipated to boost
shareholders confidence on the stock.
With a market capitalization of $4.6 billion, Middleby currently
carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the
Illinois Tool Works Inc.
Blount International Inc.
). While Gorman-Rupp sports a Zacks Rank #1 (Strong Buy), both
Illinois Tool Works and Blount International hold a Zacks Rank #2
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