This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Stanley Black & Decker Missing Some Tools

Stocks in this article: SWK LOW HD LPX SNA ITW MHK

NEW YORK ( TheStreet) -- As the U.S. housing recovery steadily became more noticeable in the past couple of years, investors in leading tool company Stanley Black & Decker (SWK - Get Report) have grown increasingly frustrated at the company's underperformance. And it's been for good reason.

Unlike, say, home improvement retailers Lowe's (LOW) and Home Depot (HD), or even lumber manufacturer Louisiana Pacific (LPX), which have all found shelter in housing, Stanley has wallowed in low margins and an over-leveraged balance sheet.

Making matters worse was commercial construction activity also taking a turn for the worse. It's true Stanley hasn't been alone in its suffering. Rivals like Snap-On (SNA) have also taken their lumps. Even so, unlike Snap-On or a large industrial tool company like Illinois Tool Works (ITW), Stanley's management shot themselves in the foot by selling off some housing-related assets. And in the October quarter, these moves came home to roost.

Stanley stock plummeted as much as 16%. It was not because the October quarter was bad; rather, because investors realized that Stanley was not as closely tied to the housing recovery as initially believed (at least not to the extent of a company like Mohawk Industries (MHK)).

In October, upon issuing guidance for the fourth-quarter that is due out Friday, management cited projected weak organic growth on (among other things) the government shutdown. By revealing margin compression within the Security segment due to weakening emerging markets, the company spooked investors even more. And it didn't stop there.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs