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Trimble Navigation Hits 52-Week High

Zacks Equity Research

Shares of Trimble Navigation Ltd. (TRMB) hit a new 52-week high of $34.77 on Dec 30, eventually closing at $34.57. The closing share price represents a strong one-year return of 15.7% and a year-to-date return of 12.4%. The average trading volume for the last three months aggregated 1503K shares.

Trimble delivered positive earnings surprises for the last four quarters with an average beat of 3.12%. This Zacks Rank #3 (Hold) company has a market cap of $8.91 billion with long-term earnings growth expectations of 17.2%.

Growth Drivers

Trimble’s various initiatives, such as the lowering of the cost structure, strategic acquisitions, product enhancements, international expansion and better-than-expected third-quarter results are some of the catalysts driving the stock.

Trimble reported decent third-quarter 2013 results with top-line increasing 17.0% year over year and also surpassing the Zacks Consensus Estimate, primarily due to higher gross margins and solid expense management. Moreover, the company’s bottom line increased 10.3% year over year. Its cash, cash equivalents and restricted cash stood at $1.22 billion compared with $1.29 billion in the previous quarter.

In addition, Trimble has made a number of acquisitions in the recent months, which will help the company to boost its top-line as well as bottom-line growth.

Recently, Trimble acquired the assets of the privately-held C3 Consulting LLC of Madison, Wis. C3 is an agricultural software firm engaged in promoting sustainable farming methods by combining crop information with detailed soil data, enabling better yield, quality and productivity of the crop. We believe this acquisition will extend Trimble’s capabilities in serving the agriculture sector.

In November, Trimble acquired the privately-held CSC (:UK)Ltd. from ISIS Equity Partners. CSC develops software solutions for the analysis and design of concrete buildings. We believe the deal will help the company to expand its construction business and increase its market share in the United Kingdom, Asia, South Africa, Middle East and the U.S., where CSC already has a strong presence.

We believe the company’s acquisitions are helping it to build a strong product portfolio and position itself in markets with better growth prospects.

Estimate Revisions

Over the last 30 days, Trimble’s earnings estimates for the current quarter as well as for fiscal 2013 remained unchanged. The Zacks Consensus Estimate for the fourth-quarter of 2013 is pegged at 33 cents per share. Earnings estimates for 2013 and 2014 remained unchanged at $1.39 and $1.58, respectively.

Other Stocks to Consider

Other better-ranked stocks that are performing well at current levels include Control4 Corp (CTRL), Daktronics Inc. (DAKT) and Garmin Ltd. (GRMN). All these stocks carry a Zacks Rank #2 (Buy).

Read the Full Research Report on GRMN
Read the Full Research Report on TRMB
Read the Full Research Report on DAKT
Read the Full Research Report on CTRL

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