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Stock worth Buying: Blount International

Zacks Equity Research

Zacks Investment Research upgraded Blount International Inc. (BLT) to a Zacks Rank #1 (Strong Buy) on Jun 27, 2014. Going by the Zacks model, the companies holding a Zacks Rank #1 have strong chances of performing better than the broader market.

Why the Upgrade?

The last few months starting Apr 2014 have been very beneficial for Blount International, with its share price growing over 13.8% since then, against a fall of 6.4% recorded year-to-date. At the same time, the company’s Zacks Rank has gone up to the foremost from Zacks Rank #5 (Strong Sell).

Further, Blount International reported impressive results for first-quarter 2014 on May 9. Adjusted earnings came in at 23 cents per share, up 10.5% year over year and above the Zacks Consensus Estimate of 17 cents. Revenues were roughly flat at $232 million. Of total revenues, roughly 71% came from the Forestry, Lawn and Garden segment while 26% were sourced from the Farm, Ranch and Agriculture segment. Operating margin expanded 80 basis points year over year.   

For 2014, Blount International anticipates revenues to be in a range of $925–$950 million and adjusted EBITDA to be within $130–$135 million. Free cash flow is expected to be in the $32−$38 million range, with capital spending roughly in the $40−$45 million range.
Over the last 60 days, the Zacks Consensus Estimate for Blount International has increased 7.4% to 87 cents per share for 2014 and 3.1% to $1.00 for 2015. Earnings are anticipated to grow by 15% in the next five years. All these factors have made us optimistic about the company’s performance in the quarters ahead. Currently, the company has an Earnings ESP of +5.0% for 2015.

Other Stocks to Consider

Blount International manufactures and markets tools for forestry, lawn, garden, farm, ranch, agriculture and construction sectors. It currently has a $670 million market capitalization. Other stocks worth considering in the industry include Gorman-Rupp Co. (GRC), Nordson Corporation (NDSN) and Barnes Group Inc. (B). All these stocks hold a Zacks Rank #2 (Buy).

Read the Full Research Report on NDSN
Read the Full Research Report on B
Read the Full Research Report on GRC
Read the Full Research Report on BLT

Zacks Investment Research