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Actuant Down to Hold on Unfavorable Business Environment

On May 31, 2016, Zacks Investment Research downgraded premium diversified machinery company Actuant CorporationATU to a Zacks Rank #3 (Hold) from a Zacks Rank #2 (Buy). Going by the Zacks model, companies holding a Zacks Rank #3 have chances of performing in line with the broader market.

Why the Downgrade?

Actuant strives to expand its business globally through various initiatives. However, the company's international revenues and margins have been affected by the strengthening of the U.S. dollar in recent times. We also note that lower demand for the company's products in the general industrial, oil & gas, off-highway and agricultural markets have put pressure on its revenues and margins. Moreover, unfavorable sales mix and production due to inventory de-stocking have been hurting the company's profitability. Further, stiff competition exposes the company to threats of market share loss.

Nonetheless, Actuant has a high brand value and is on track to improve its top line through global expansion. This apart, the company undertakes specialized cost-reduction initiatives, productivity enhancement schemes as well as invests in innovative efforts to bolster its growth prospects. Also, the company's inorganic growth is impressive.

Stocks to Consider

Some better-ranked stocks in the industry include Kennametal Inc. KMT , Sandvik AB SDVKY and Alarm.Com Holdings, Inc. ALRM . Kennametal current sports a Zacks Rank #1 (Strong Buy), while both Sandvik AB and Alarm.Com Holdings hold a Zacks Rank #2 (Buy).

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ACTUANT CORP (ATU): Free Stock Analysis Report

KENNAMETAL INC (KMT): Free Stock Analysis Report

SANDVIK AB (SDVKY): Free Stock Analysis Report

ALARM.COM HLDGS (ALRM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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