We find Alamo Group, Inc. ALG a solid choice for investors seeking exposure in the machinery space. The agriculture and infrastructure equipment manufacturer and supplier has solid growth prospects driven by improving domestic and global economic backdrop, initiatives undertaken for improvement of operational initiatives and synergistic benefits from acquired assets.
The stock, currently with $1.3 billion market capitalization, has been upgraded to a Zacks Rank #2 (Buy) on Dec 26. Its investment appeal is further accentuated by a favorable VGM Score of B.
Below we discuss why investors should consider buying Alamo Group’s stock.
Why the Upgrade?
Market sentiments have been positive for Alamo Group, with the stock yielding 50.8% return year to date compared with 47.1% growth of the industry. Also, the company delivered better-than-expected results in two of the first three quarters of 2017 while recording in line results in one. In the last reported quarter, the company pulled off a positive earnings surprise of 12.90%. The stock price has increased 8.7% since the earnings announcement on Oct 31.
Also, the stock’s earnings estimates for both 2017 and 2018 have been raised by two brokerage firms. Currently, the Zacks Consensus Estimate is pegged at $4.49 for 2017 and $5.05 for 2018, representing growth of 7.7% and 11.7% from their respective tallies 60 days ago.
Alamo Group, Inc. Price and Consensus
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