Reasons To Hold On To Lincoln Electric (LECO) Stock For Now
Zacks Investment Research | Oct 15, 2017 09:26PM ET
Lincoln Electric Holdings Inc. (NASDAQ:LECO) has an impressive earnings history having outperformed the Zacks Consensus Estimate in the preceding four quarters, with an average beat of 5.45%. Further, the company is anticipated to perform well on both the top and bottom-line fronts in the second half of 2017 as its end markets continue to improve. Around 90% of revenues is now exposed to end sector applications which are trending positively. Additionally, its focus on commercializing innovative products, relatively stable pricing environment and cost-cutting initiatives, acquisitions will drive growth.
Lincoln Electric is a full-line manufacturer and reseller of welding and cutting products with products ranging from welding power sources, wire feeding systems, robotic welding packages, fume extraction equipment, consumables along with fluxes to regulators and torches used in cutting. It has a market capitalization of $6.2 billion and carries a Zacks Rank #3 (Hold). Here's why investors should hold on to the stock at present.
Earnings Estimate Revisions
Positive estimate revisions reflect optimism in the company’s potential, as earnings growth is often an indication of robust prospects (and stock price gains) ahead. Estimates for Lincoln Electric have moved up in the past 90 days, reflecting analysts’ bullish outlook. The earnings estimate has gone up 2% and 3% for 2017 and 2018, respectively.
The Zacks Consensus Estimate for earnings for fiscal 2017 reflects a year-over-year growth of 13.9% and for fiscal 2018 projects growth of 11.3%.
Further, the company’s long-term earnings growth rate of 10.5% is promising.
Return on Assets (ROA)
Lincoln Electric currently has a ROA of 11.9% while the industry's ROA is 6.0%. An above-average ROA denotes that the company is generating earnings by effectively managing assets.
Price Performance
The company outperformed the Zacks Investment Research
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