Illinois Tool Works (ITW) Hits New Lifetime High

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Illinois Tool Works ( ITW) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Illinois Tool Works as such a stock due to the following factors:

  • ITW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $151.7 million.
  • ITW has traded 1.2 million shares today.
  • ITW is trading at a new lifetime high.

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More details on ITW:

Illinois Tool Works Inc. manufactures and sells a range of industrial products and equipment worldwide. The stock currently has a dividend yield of 2.2%. ITW has a PE ratio of 14.8. Currently there are 8 analysts that rate Illinois Tool Works a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Illinois Tool Works has been 1.6 million shares per day over the past 30 days. Illinois Tool Works has a market cap of $34.9 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.20 and a short float of 1.8% with 3.47 days to cover. Shares are up 28.3% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Illinois Tool Works as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins, solid stock price performance and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, ITW has a quick ratio of 1.53, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Machinery industry and the overall market, ILLINOIS TOOL WORKS's return on equity exceeds that of both the industry average and the S&P 500.
  • 39.77% is the gross profit margin for ILLINOIS TOOL WORKS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.02% is above that of the industry average.
  • Compared to its closing price of one year ago, ITW's share price has jumped by 27.71%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ITW should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $643.00 million or 26.32% when compared to the same quarter last year. Despite an increase in cash flow, ILLINOIS TOOL WORKS's cash flow growth rate is still lower than the industry average growth rate of 63.71%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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