On Jun 25, 2013, Zacks Investment Research upgraded Lincoln Electric Holdings Inc. (LECO) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Lincoln Electric’s share price and earnings estimates have witnessed a sharp upward trend on the back of better-than-expected first-quarter fiscal 2013 bottom-line results. This manufacturer and reseller of welding and cutting products delivered impressive results on the back of its successful consumer-oriented strategies, portfolio realignment initiatives, product innovation and cost containment efforts.
Despite a 1% year-over-year dip in total revenue, Lincoln Electric’s first-quarter earnings improved 21% to 92 cents per share, sweeping past the Zacks Consensus Estimate of 78 cents. Including this earnings beat, the company has consecutively outperformed the Zacks Consensus Estimate in last three of four quarters. Average earnings surprise for four quarters in 7.4%. Despite softer volumes, Lincoln continues to effectively drive margins through enhanced product mix, optimizing manufacturing footprint and focusing on cost.
Shares of Lincoln Electric have delivered a year-to-date return of roughly 14.6%, ahead of the S&P 500. Shares of Lincoln also attained a 52-week high on May 31 of $60.58.
Going forward, Lincoln Electric will benefit from its acquisition strategy, introduction of new products and long-term growth in its key global markets including power generation, offshore drilling, pipelines and automotive sectors.
Following the results, the Zacks Consensus Estimate for fiscal 2013 increased 2% to $3.54 and for 2014 it went up 1% to $3.85 per share in the last 60 days.
Other Stocks to Consider
Apart from Lincoln Electric, Graco Inc. (GGG), Edwards Group Limited (EVAC) and Kawasaki Heavy Industries Ltd. (KWHIY), all carrying a Zacks Rank #1 (Strong Buy), are capable of continuing with their upbeat performances.
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