Why Sensata Technologies (ST) Stock Is Higher Today

NEW YORK (TheStreet) -- Shares of Sensata Technologies Holding (ST) , a sensors and electrical controls maker, are up 4.07% to $48,05 after the company said it would buy Schrader group of companies for an enterprise value of $1 billion to benefit from a growing market for tire pressure monitoring sensors, Reuters reports.

Schrader International, held by private equity firm Madison Dearborn Partners LLC, is the global leader in TPMS, Sensata said today.


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TheStreet Ratings team rates SENSATA TECHNOLOGIES HLDG NV as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate SENSATA TECHNOLOGIES HLDG NV (ST) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 13.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SENSATA TECHNOLOGIES HLDG NV reported significant earnings per share improvement 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 two years. We feel that this trend should continue. During the past fiscal year, SENSATA TECHNOLOGIES HLDG NV increased its bottom line by earning $1.05 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($2.44 versus $1.05).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 213.6% when compared to the same quarter one year prior, rising from $20.37 million to $63.89 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Electrical Equipment industry and the overall market, SENSATA TECHNOLOGIES HLDG NV's return on equity exceeds that of both the industry average and the S&P 500.
  • 38.55% is the gross profit margin for SENSATA TECHNOLOGIES HLDG NV which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.09% is above that of the industry average.
  • You can view the full analysis from the report here: ST Ratings Report

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