Reasons Why You Should Retain Altra Industrial (AIMC) for Now

Altra Industrial Motion Corp. AIMC stands to gain from strength across its multiple end markets in the quarters ahead despite supply-chain constraints, raw material cost inflation and foreign-currency headwinds. In second-quarter 2022, AIMC’s sales flourished in the specialty machinery & factory automation, construction, material handling, agriculture, and turf & garden end markets. Solid orders and a healthy backlog level are expected to be beneficial in the near term. Also, near-term growth opportunities in the end-markets like robotics and specialty machinery are solid.

Altra Industrial has been strengthening and expanding its businesses through asset additions for a while. The buyout of Nook Industries in January 2022 strengthened its linear motion control product offerings and expanded its presence in factory automation, medical and defense end markets. Nook acquisition had a positive impact of 2.5% on net sales growth in the second quarter of 2022. AIMC expects to realize around $6 million of annual cost and sales synergies by the fourth year from this buyout.

AIMC’s healthy cash position enables it to reward its shareholders handsomely. During the first six months of 2022, Altra Industrial paid out dividends of $10.5 million to its shareholders. In April 2022, its board of directors approved a 12.5% hike in its quarterly dividend rate. AIMC authorized a share buyback program of up to $300 million in April 2022, to be completed by Dec 31, 2024.

Altra Industrial Motion Corp. Price and Consensus

Altra Industrial Motion Corp. Price and Consensus

Altra Industrial Motion Corp. price-consensus-chart | Altra Industrial Motion Corp. Quote

Considering the above-mentioned positives, we believe, investors should retain the Altra Industrial stock for now, as is suggested by its current Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked companies from the Industrial Products sector are discussed below:

RBC Bearings Incorporated ROLL presently sports a Zacks Rank #1 (Strong Buy). ROLL delivered a trailing four-quarter earnings surprise of 9.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.

ROLL’s earnings estimates have increased 32.7% for fiscal 2023 (ending March 2023) in the past 60 days. Its shares have gained 13.8% in the past six months.

Valmont Industries, Inc. VMI presently has a Zacks Rank #2 (Buy). VMI’s earnings surprise in the last four quarters was 13.7%, on average.

In the past 60 days, Valmont’s earnings estimates have increased 0.1% for 2022. The stock has rallied 9.9% in the past six months.

Greif, Inc. GEF presently has a Zacks Rank of 2. GEF delivered a trailing four-quarter earnings surprise of 22.4%, on average.

GEF’s earnings estimates have increased 4.6% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 4.3% in the past six months.

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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.

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