Lindsay Buys Net Irrigate, Expands Remote Monitoring Solution
Lindsay Corporation (LNN) recently acquired an agriculture Internet of Things (IoT) technology company Net Irrigate, LLC which is a provider of remote monitoring solutions for irrigation customers. Notably, Net Irrigate will unite with Lindsay's FieldNET brand of remote irrigation monitoring and control solutions to provide sustainable farming practices to growers.
Established in 2006, Net Irrigate produces tailored remote monitoring devices and reporting software for government agencies and large farms to assist with ground and surface water conservation. The company has installed more than 10,000 monitoring devices, including the CircleScout remote irrigation management hardware and software solution, across more than 2000 agricultural enterprises.
This latest buyout will help both companies offer innovative solutions for farmers to increase energy and water efficiencies as well as implement more sustainable farming techniques. Lindsay's FieldNET irrigation technology will allow Net Irrigate’s customers to access additional functionality and solutions. In fact, the acquisition strengthens Lindsay’s market position in remote monitoring capabilities.
Lindsay’s FieldNET Advisor enables growers to maximize profitability through better irrigation management by helping them maximize their yield output and crop performance, reduce input costs, and conserve water, save time and labor by providing quick, simple, intuitive irrigation management recommendations and alerts. Lindsay is focused on its strategy to expand the company’s global reach with FieldNET Advisor. It’s Field NET Pivot Watch, a low-cost solar-powered remote telemetry device that mounts onto any central pivot irrigation system, is also gaining popularity.
Recently, the company reported mixed third-quarter fiscal 2020 (ended May 31 2020) results. Adjusted net earnings of 93 cents per share beat the Zacks Consensus Estimate of 80 cents and surged 86% year over year. Revenues climbed 2% year over year to $123 million. The top-line figure came in line with the Zacks Consensus Estimate. The company’s Foundation for Growth initiative continues to drive margins despite the COVID-19-related shipment delays hurting the top line.
Concerns over irrigation equipment demand along with low commodity prices, makes the outlook uncertain for the Irrigation segment for the fiscal fourth quarter. However, the infrastructure business is poised to grow on the Highways England project and the fulfillment of a large order in Japan. Also, momentum in Road Zipper Systems will contribute to the segment’s performance.
Several factors that might impact commodity prices and farm income, including current-year crop results, export demand related to the U.S.-China Phase 1 trade agreement, and the level of government support payments to assist farmers are likely to thwart demand for the company’s products in fiscal 2021. Nevertheless, it projects continued growth in technology products and services as farmers generate solid returns from these investments. In international markets, demand will remain strong on rising food security concerns as a result of the pandemic.
Price Performance
Lindsay’s shares have lost 7.5% over the past three months, as against the industry’s growth of 8%.
Zacks Rank and Stocks to Consider
Lindsay currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Lakeland Industries, Inc. LAKE, Energous Corporation WATT and TPI Composites, Inc. TPIC. While Lakeland Industries sports a Zacks Rank #1 (Strong Buy), Energous Corporation and TPI Composites carry a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lakeland Industries has a projected earnings growth rate of 127.8% for fiscal 2020. The company’s shares have appreciated 50.9% in the past three months.
Energous Corporation has an expected earnings growth rate of 44% for 2020. The stock has surged 252.6% over the past three months.
TPI Composites has an estimated earnings growth rate of 197% for the ongoing year. The company’s shares have rallied 62.3% in the past three months.
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