NEW YORK (TheStreet) -- Belden(BDC) - Get Report shares are up 9.36% to $81.93 in early market trading on Wednesday after the networking and cable products manufacturer announced that it has signed a definitive agreement to acquire cybersecurity firm Tripwire for $710 million.
The company said that the acquisition will add 65 cents to its adjusted income from continuing operations in 2015. The companies had previously worked together in September to improve infrastructure cybersecurity in manufacturing organizations.
Belden said that the combined companies will provide cybersecurity solutions to the industrial and broadcast markets with the deal expected to be completed in the first quarter of 2015.
TheStreet Ratings team rates BELDEN INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate BELDEN INC (BDC) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, expanding profit margins, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 16.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BELDEN INC has improved earnings per share by 18.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, BELDEN INC increased its bottom line by earning $2.34 versus $0.92 in the prior year. This year, the market expects an improvement in earnings ($4.22 versus $2.34).
- 39.07% is the gross profit margin for BELDEN INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.54% trails the industry average.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Electronic Equipment, Instruments & Components industry average, but is greater than that of the S&P 500. The net income increased by 16.4% when compared to the same quarter one year prior, going from $29.07 million to $33.85 million.
- You can view the full analysis from the report here: BDC Ratings Report