Badger Meter (BMI) Downgraded To Sell: Should You Dump?
Zacks Investment Research | Jun 19, 2017 09:39PM ET
On Jun 20, Zacks Investment Research downgraded Badger Meter Inc. (NYSE:BMI) to a Zacks Rank #4 (Sell). Going by the Zacks model, companies carrying a Zacks Rank #4 or 5 (Strong Sell) have strong chances of underperforming the broader market.
Why The Downgrade?
Badger Meter’s gross margin in the first quarter of 2017 was affected as costs of materials, including brass, escalated in the quarter year over year. While higher capacity utilization and product mix remain tailwinds, increasing material cost is likely to continue to hurt margins in the quarters ahead.
The company had a significant order from the Middle East in first-quarter 2016 which did not recur this year. This will adversely affect revenues. Further, it noted that sales from the Middle East were irregular in nature. Also, several large flow instrumentation product sales that occurred in the first quarter of 2016 did not recur in the first quarter of 2017 and overall business remains flat.
In the last one year, Badger Meter has underperformed the Zacks classified Original post
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