Applied Industrial Technologies
The industrial products distribution company earlier this month acquired Solutions Industrielles Chicoutimi and Spécialités Industrielles Harvey, which are two Quebec distributors."AIT, a leading industrial distributor of power transmission and fluid power supplies, should continue to increase revenue over the next five years at 8% compounded through improved product offerings, increased market presence, and the unbundling of value-added services (it historically has not charged for these services), including training and inventory management," Wells Fargo analysts wrote in a report Monday. "Moreover, AIT's margin initiatives, including faster implementation of vendor price increases and improved employee productivity, should drive the distributor's improved operating performance." Shares of Applied Industrial Technologies hit a 52-week high of $42.01 on Wednesday. The stock's 52-week low of $24.50 was set on Aug. 9. Applied Industrial Technologies has a forward P/E of 15.3X; the average for industrial suppliers is 16.9X. For comparison, both Fastenal (FAST) and W.W. Grainger (GWW) have higher forward P/Es of 29.2X and 17.5X respectively. Five of the eight analysts who cover Applied Industrial Technology rated it a hold; three gave it a buy rating. Applied Industrial Technologies gets an A- grade from TheStreet Ratings with a buy rating and $47.46 price target. The stock has risen 17.94% year to date.
Kennametal The engineered components supplier reported second-quarter earnings of $73.7 million, or 92 cents a share, last month. The performance was an improvement from year-ago earnings of $43.5 million, or 53 cents a share. "While one month does not indicate a trend, we are encouraged by the solid start to the new year with sales for the month of January estimated being up 10% on a tough y/y comp (Jan 2011 est. up 30% y/y)," Jefferies analysts wrote in a report Tuesday. "We anticipated the order rate to moderate due to tougher comparisons as well as look for some fx headwind as the year progresses." Shares of Kennametal hit a 52-week high of $46.66 on Wednesday. The stock's 52-week low of $29.30 was set on Oct. 4. Kennametal has a forward P/E of 10.7X; the average for industrial machinery is 15.2X. For comparison, Flowserve (FLS) and Donaldson (DCI) both have higher forward P/Es of 13.5X and 20.4X respectively. Nine of the 14 analysts who cover the company have buy ratings on the stock. Four analysts rate it at hold and one is at sell. TheStreet Ratings gives Kennametal a B+ grade with a buy rating and has a $54.50 price target on the shares. The stock has increased 24.07% year to date.
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