Shares of Actuant Corporation (ATU) hit a new 52-week high of $37.25 on Sep 9, and eventually closed at $37.22. Shares of this machinery producer have been on a rise since it announced the acquisition of Viking SeaTech.
Year-to-date, share prices have recorded a healthy return of 33.4%. The company’s long-term estimated earnings per share growth rate is 12.6%. Average volume of shares traded over the last three months came in at 469.1K.
Actuant reported improved year-over-year results for the third quarter of fiscal 2013. Earnings per share improved 21.6% year over year to 62 cents. However, revenues were almost flat compared with the year-ago quarter and stood at $344.2 million.
Exiting the fiscal third-quarter 2013, Actuant had a strong balance sheet, with cash and cash equivalents of $161.4 million.
In Aug 2013, Actuant completed the acquisition of Scotland-based Viking SeaTech, for roughly $225.0 million. A majority of Viking’s revenues are derived from the company’s offshore vessel mooring solutions which include design, rental, installation and inspection. The acquisition is expected to be accretive to Actuant’s earnings and revenues in the coming quarters, due to the similarity of operations of the two companies.
Actuant has a successful strategy of growing inorganically. In the fiscal third quarter of 2013, the company had a 3% contribution from acquisitions. Actuant also intends to increase its free cash flow and reach a level of $190.0 million to $200.0 million in fiscal 2013 and $175.0 million in fiscal 2014. Actuant believes that it also has the potential to increase its sales in the coming quarters. Core sales are expected to grow by 3%–5% year over year in fiscal 2014.
Other Stocks to Consider
Actuant currently carries a Zacks Rank #3 (Hold). Other stocks worth a watch in the industry are Alamo Group, Inc. (ALG), Gorman-Rupp Co. (GRC) and Lindsay Corporation (LNN). While Alamo Group and Gorman-Rupp carry a Zacks Rank #1 (Strong Buy), Lindsay Corp. carries a Zacks Rank #2 (Buy).
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