TriMas Corporation (NASDAQ:TRS) continues to benefit from upbeat outlook, improving manufacturing footprint and stable order patterns. Further, the company’s long-term earnings growth rate of 5% makes us confident of its inherent strength. Let’s delve deeper and find out what’s fueling this stock.
Growth Drivers
TriMas delivered third-quarter 2017 adjusted earnings per share of 39 cents, up 11.4% year over year. Also, its sales increased 3.5% year over year in the quarter. The company will continue to focus on leveraging the TriMas Business Model to drive performance. Notably, TriMas has been working diligently to mitigate near-term issues impacting its businesses. It updated its full-year earnings per share outlook to the range of $1.37-$1.43. The company also projects 2017 sales to be up 2-4% compared to the year-ago level.
Meanwhile, the company remains committed to exploring actions to improve manufacturing footprint and strategies to drive long-term success. It recently closed the sale of its Mexico City facility. Following relocation to a new facility in San Miguel, TriMas immediately began marketing the old facility to secure a solid disposition. TriMas is also in the process of exiting a location in Tulsa to reduce 2018 infrastructure costs in the Arrow Engine business.
The company continues to record more stable order patterns from customers in the Aerospace segment and is optimistic that a more consistent demand level will result in further opportunities for improved manufacturing efficiencies. In its Packaging segment, TriMas continues to invest in new products and remains focused on sales initiatives to drive sustainable, long-term growth.
Other factors that make TriMas a favorable investment option include:
Solid Zacks Rank, Score Combination
TriMas sports a Zacks Rank #1 (Strong Buy). It has a VGM Score of A. Here V stands for Value, G for Growth and M for Momentum. The company’s score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners. In fact, our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), make solid investment choices.
Price Performance
TriMas’ shares have outperformed the industry in the past year. The stock has gained 27.3% compared to 17.1% growth recorded by the industry.
Return on Assets (ROA)
TriMas currently has a ROA of 6%, while the industry's ROA is 3.6%. An above-average ROA denotes that the company is generating earnings by effectively managing assets.
Stock Seems Undervalued
TriMas has a trailing 12-month price earnings (P/E) ratio of 19.8, lower than the industry’s average trailing 12-month P/E ratio of 24.8. Based on this, the stock seems undervalued.
Other Stocks to Consider
Some other top-ranked stocks in the sector include SKF AB (OTC:SKFRY) , The Timken Company (NYSE:TKR) and Worthington Industries, Inc. (NYSE:WOR) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
SKF has a long-term earnings growth rate of 14%. Its shares have rallied 24.6%, over the past six months.
Timken has a long-term earnings growth rate of 11.6%. The company’s shares have been up 13.6% during the same time frame.
Worthington Industries has a long-term earnings growth rate of 4.2%. The stock has gained 25.8% in six months’ time.
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Worthington Industries, Inc. (WOR): Free Stock Analysis Report
TriMas Corporation (TRS): Free Stock Analysis Report
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