RBC Bearings (ROLL) Shares Up 36.2% in 3 Months: Here's Why
RBC Bearings Incorporated ROLL appears in good shape, with its shares having rallied 36.2% over the past three months compared with the industry’s growth of 3.5%.
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Catalysts Behind the Price Surge
RBC Bearings’ diversified business structure allows it to mitigate the adverse impacts of weakness in one end market with strength across the others. ROLL has been benefiting from progress in the aircraft OEM end market for a while, which is driving the Aerospace/Defense segment. Its Industrial segment is gaining from strength in the semiconductor, mining, general industrial and energy end markets. In first-quarter fiscal 2023 (ended June 2022), ROLL’s industrial segment sales increased 286.8% and Aerospace/Defense revenues grew 10% on a year-over-year basis.
RBC Bearings utilizes its cash flow to reward its shareholders through dividend payouts and share-repurchase programs. In the first three months of fiscal 2023, ROLL used $6 million to repurchase shares, up 4.8% year over year. While exiting the first quarter of fiscal 2023, it was left to repurchase shares worth $73.1 million.
RBC Bearings intends to strengthen and expand its businesses through asset additions. ROLL’s acquisition of ABB Ltd’s DODGE mechanical power transmission unit (November 2021) expanded its reach, product offerings and customer base across the industrial, aerospace and defense markets. Also, this buyout is anticipated to expand ROLL’s cash EPS by 40-60% in the initial year of completing the transaction.
Zacks Rank & Other Stocks to Consider
RBC Bearings sports a Zacks Rank #1 (Strong Buy) at present. Some other top-ranked companies from the industrial products sector are discussed below:
Applied Industrial Technologies, Inc. AIT presently sports a Zacks Rank of 1. AIT delivered a trailing four-quarter earnings surprise of 22.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
AIT’s earnings estimates have increased 5.8% for fiscal 2023 (ending June 2023) in the past 60 days. Its shares have rallied 9.4% in the past three months.
Greif, Inc. GEF presently has a Zacks Rank #2 (Buy). GEF delivered a trailing four-quarter earnings surprise of 22.9%, on average.
GEF’s earnings estimates have increased 0.4% for fiscal 2022 (ending October 2022) in the past 60 days. Its shares have risen 19% in the past three months.
Valmont Industries, Inc. VMI presently has a Zacks Rank of 2. 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 3.8% for 2022. The stock has rallied 9.2% in the past three months.
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