2013 is panning out to be a good year for electronic instruments maker Ametek (AME). Shares of the $10 billion stock have rallied more than 12% since the start of the new year. Ametek is involved in manufacturing everything from temperature sensors to specialty motors used by original equipment manufacturers. That niche business affords AME a sticky customer base with a high switching cost, a formula for success in the manufacturing business.
Like a lot of other manufacturing conglomerates, Ametek has traditionally used a growth-though-acquisition approach to increasing its scale, a model that's proven especially effective in increasing revenues without creating extra distractions for management. Because new units are able to operate (and be evaluated) independently, the firm has extra top line diversification.That model generates double-digit net margins for Ametek, and a balance sheet that carries pretty reasonable levels of leverage. The electronic instruments business may not be the most exciting, but this stock is proving to investor that it can be lucrative nonetheless. Rising analyst sentiment in AME is spurring us to bet on shares of this Rocket Stock in March. To see all of this week's Rocket Stocks in action, check out the Rocket Stocks portfolio at Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV