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Astec Hits 52-Week High

Zacks Equity Research

Astec Industries Inc.’s (ASTE) shares attained a 52-week high of $41.68 during intraday trading on Mar 7, finally closing lower at $41.34.

The company has delivered a year-to-date return of about 7.3%, outperforming the S&P 500 return of 2%. Astec has a market cap of $945 million. Average volume of shares traded over the last 3 months was approximately 89K. The company has long-term estimated earnings per share growth rate of 10%.

What’s Driving Astec?

Shares of Astec have been on the rise since the company reported upbeat fourth-quarter results and 2013  results on Feb 25.

Earnings improved 50% to 36 cents per share from 24 cents in the year-earlier quarter. Moreover, the reported figure beat the Zacks Consensus Estimate of 31 cents. The year-over-year growth was driven by successful operation of the new wood pellet plant in Georgia and strong performance of the aggregate processing equipment businesses. For full-year 2013, Astec reported earnings per share of $1.69, up 15% from $1.48 in 2012.

The U.K. parliament has approved a tax credit for utilities to burn wood pellets as a source of fuel and switch from coal-fired plants to wood plants. This opens up a sizeable opportunity for Astec as the company is a supplier of all equipments used in wood pellet plants. Astec continues to receive new orders in addition to existing orders for wood pellet plants and these are expected to be significant contributors to its top line.

Astec continues to invest significantly in increasing its capacity, manufacturing new products as well as upgrading its existing products. Introduction of products such as stabilizers, new models at Roadtec, larger crushers at Telsmith, pump trailers and vertical drilling rigs will effectively contribute to sales growth. The revealing of 37 new products at ConExpo, the premier construction equipment trade show, will act as a catalyst.

Other Stocks to Consider

Astec currently holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include The Manitowoc Company, Inc. (MTW), Hyster-Yale Materials Handling, Inc. (HY) and Komatsu Ltd. (KMTUY). While Manitowoc sports a Zacks Rank #1 (Strong Buy), Hyster-Yale Materials Handling and Komatsu carry a Zacks Rank #2 (Buy).

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Read the Full Research Report on MTW
Read the Full Research Report on KMTUY

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