Zacks Investment Research downgraded
Blount International Inc.
) to a Zacks Rank #5 (Strong Sell) on Mar 8, 2014. Going by the
Zacks model, the companies holding a Zacks Rank #5 have strong
chances of performing worse than the broader market. Hence,
investors seeking exposure in machinery industry are advised to
avoid investing in or to sell their existing holdings in Blount
Why the Downgrade?
ALTRA HOLDINGS (AIMC): Free Stock Analysis
BLOUNT INTL (BLT): Free Stock Analysis Report
KADANT INC (KAI): Free Stock Analysis Report
SUN HYDRAULICS (SNHY): Free Stock Analysis
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Market sentiments have been weak since Blount International
revised its guidance for 2013 and provided its outlook for 2014
on Feb 10, 2014. Since then, the share price of the company has
fallen 1.4% while it provided a negative year-to-date return of
11.5%. A snapshot of the revised guidance is provided below:
Revenues are expected to be roughly $901 million lower than the
earlier-expected range of $905-$915 million. The revised guidance
reflects a year-over-year decrease of 3%. Adjusted earnings
before interest, tax, depreciation and amortization (EBITDA) are
expected to be $125 million, down from both 2013 earnings of $136
million and the previous guidance of $310 million.
For 2014, Blount International anticipates revenues to be within
a range of $925-$950 million and adjusted EBITDA to be within a
range of $130-$135 million. Sales growth in the Forestry, Lawn
and Garden segment is expected to be 4% while in the Farm, Ranch
and Agriculture segment, sales growth is predicted to be roughly
8%. Free cash flow is expected to be $35 million and capital
spending to be roughly $45 million.
In the last 60 days, the Zacks Consensus Estimate for Blount
International decreased 18.2% to 81 cents for 2014. This, along
with the negative average earnings surprise of 13.7% for the
trailing quarters, raises concern over the company's performance
in the quarters ahead.
Other Stocks to Consider
Blount International is a $613 million company manufacturing and
marketing tools for forestry, lawn and garden, farm, ranch,
agriculture and construction sectors. Some better-ranked stocks
in the machinery industry include
Sun Hydraulics Corp.
Altra Industrial Motion Corp.
). While Kadant and Sun Hydraulics hold a Zacks Rank #1 (Strong
Buy), Altra Industrial Motion carries a Zacks Rank #2 (Buy).