Graco Inc. GGG has recently completed the acquisition of the megasonic and ultrasonic wet cleaning systems business of PCT Systems (“PCT”). The financial terms of the transaction have been kept under wraps.
Based in San Jose, CA, PCT specializes in designing and manufacturing a range of products, including heated process tanks, megasonic generators, transducer assemblies and custom tanks. These are crafted from stainless steel, plastics and quartz. It serves industries like semiconductors, optics, glass and additives.
Acquisition Rationale
The latest buyout is in sync with Graco’s policy of acquiring businesses to strengthen its business and expand market share. The inclusion of PCT’s business will enhance GGG’s portfolio of high-purity chemical delivery equipment that is used for making semiconductors, solar panels, LED displays and other electronics. This acquisition aligns with the company’s White Knight business and will enable it to expand its presence in the semiconductor market.
Graco’s Zacks Rank and Price Performance
GGG currently carries a Zacks Rank #4 (Sell). Weakness in the broader industrial sector has been negatively impacting its results. An increase in general and administrative expenses might continue affecting Graco’s profitability. Given its international presence, forex woes are an added concern.
In the past year, the stock gained 5.8% compared with the industry’s 22.3% growth.
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Graco expects improving order rates and product innovations to drive its performance in the quarters ahead. Its investments in manufacturing and distribution facilities are expected to foster growth.
Stocks to Consider
Better-ranked companies from the same space are discussed below.
Flowserve Corporation FLS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 18.2%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2024 earnings has increased 3.8%.
Crane Company CR presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 2%.
Ferguson Enterprises Inc. FERG currently carries a Zacks Rank of 2. FERG delivered a trailing four-quarter average earnings surprise of 2.6%.
In the past 60 days, the consensus estimate for Ferguson’s fiscal 2025 earnings has remained steady.
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Graco Inc. (GGG) : Free Stock Analysis Report
Crane Company (CR) : Free Stock Analysis Report
Ferguson plc (FERG) : Free Stock Analysis Report
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