Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries 3 Reasons to Sell AIT and 1 Stock to Buy Instead By: StockStory December 24, 2024 at 04:09 AM EST Applied Industrial currently trades at $243 and has been a dream stock for shareholders. It’s returned 264% since December 2019, more than tripling the S&P 500’s 85.4% gain. The company has also beaten the index over the past six months as its stock price is up 27.5%. Is now the time to buy Applied Industrial, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free. Despite the momentum, we're sitting this one out for now. Here are three reasons why there are better opportunities than AIT and a stock we'd rather own. Why Is Applied Industrial Not Exciting?Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE:AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.1. Long-Term Revenue Growth DisappointsA company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Applied Industrial’s 5.3% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the industrials sector. 2. Slow Organic Growth Suggests Waning Demand In Core BusinessInvestors interested in Engineered Components and Systems companies should track organic revenue in addition to reported revenue. This metric gives visibility into Applied Industrial’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement. Over the last two years, Applied Industrial’s organic revenue averaged 5.4% year-on-year growth. This performance was underwhelming and suggests it may need to improve its products, pricing, or go-to-market strategy, which can add an extra layer of complexity to its operations. 3. Free Cash Flow Margin Stuck in NeutralIf you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills. As you can see below, Applied Industrial’s margin was unchanged over the last five years, showing it couldn’t improve. Its free cash flow margin for the trailing 12 months was 9.1%. Final JudgmentApplied Industrial isn’t a terrible business, but it doesn’t pass our bar. With its shares outperforming the market lately, the stock trades at 24.2× forward price-to-earnings (or $243 per share). At this valuation, there’s a lot of good news priced in - you can find better investment opportunities elsewhere. We’d suggest looking at Google, whose cloud computing and YouTube divisions are firing on all cylinders. Stocks We Would Buy Instead of Applied Industrial The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them. Get started by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,691% between September 2019 and September 2024) as well as under-the-radar businesses like Comfort Systems (+783% five-year return). Find your next big winner with StockStory today for free. Stock Quote API & Stock News API supplied by www.cloudquote.io Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
3 Reasons to Sell AIT and 1 Stock to Buy Instead By: StockStory December 24, 2024 at 04:09 AM EST Applied Industrial currently trades at $243 and has been a dream stock for shareholders. It’s returned 264% since December 2019, more than tripling the S&P 500’s 85.4% gain. The company has also beaten the index over the past six months as its stock price is up 27.5%. Is now the time to buy Applied Industrial, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free. Despite the momentum, we're sitting this one out for now. Here are three reasons why there are better opportunities than AIT and a stock we'd rather own. Why Is Applied Industrial Not Exciting?Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE:AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.1. Long-Term Revenue Growth DisappointsA company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Applied Industrial’s 5.3% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the industrials sector. 2. Slow Organic Growth Suggests Waning Demand In Core BusinessInvestors interested in Engineered Components and Systems companies should track organic revenue in addition to reported revenue. This metric gives visibility into Applied Industrial’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement. Over the last two years, Applied Industrial’s organic revenue averaged 5.4% year-on-year growth. This performance was underwhelming and suggests it may need to improve its products, pricing, or go-to-market strategy, which can add an extra layer of complexity to its operations. 3. Free Cash Flow Margin Stuck in NeutralIf you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills. As you can see below, Applied Industrial’s margin was unchanged over the last five years, showing it couldn’t improve. Its free cash flow margin for the trailing 12 months was 9.1%. Final JudgmentApplied Industrial isn’t a terrible business, but it doesn’t pass our bar. With its shares outperforming the market lately, the stock trades at 24.2× forward price-to-earnings (or $243 per share). At this valuation, there’s a lot of good news priced in - you can find better investment opportunities elsewhere. We’d suggest looking at Google, whose cloud computing and YouTube divisions are firing on all cylinders. Stocks We Would Buy Instead of Applied Industrial The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them. Get started by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,691% between September 2019 and September 2024) as well as under-the-radar businesses like Comfort Systems (+783% five-year return). Find your next big winner with StockStory today for free.
Applied Industrial currently trades at $243 and has been a dream stock for shareholders. It’s returned 264% since December 2019, more than tripling the S&P 500’s 85.4% gain. The company has also beaten the index over the past six months as its stock price is up 27.5%. Is now the time to buy Applied Industrial, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free. Despite the momentum, we're sitting this one out for now. Here are three reasons why there are better opportunities than AIT and a stock we'd rather own. Why Is Applied Industrial Not Exciting?Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE:AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.1. Long-Term Revenue Growth DisappointsA company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Applied Industrial’s 5.3% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the industrials sector. 2. Slow Organic Growth Suggests Waning Demand In Core BusinessInvestors interested in Engineered Components and Systems companies should track organic revenue in addition to reported revenue. This metric gives visibility into Applied Industrial’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement. Over the last two years, Applied Industrial’s organic revenue averaged 5.4% year-on-year growth. This performance was underwhelming and suggests it may need to improve its products, pricing, or go-to-market strategy, which can add an extra layer of complexity to its operations. 3. Free Cash Flow Margin Stuck in NeutralIf you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills. As you can see below, Applied Industrial’s margin was unchanged over the last five years, showing it couldn’t improve. Its free cash flow margin for the trailing 12 months was 9.1%. Final JudgmentApplied Industrial isn’t a terrible business, but it doesn’t pass our bar. With its shares outperforming the market lately, the stock trades at 24.2× forward price-to-earnings (or $243 per share). At this valuation, there’s a lot of good news priced in - you can find better investment opportunities elsewhere. We’d suggest looking at Google, whose cloud computing and YouTube divisions are firing on all cylinders. Stocks We Would Buy Instead of Applied Industrial The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them. Get started by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,691% between September 2019 and September 2024) as well as under-the-radar businesses like Comfort Systems (+783% five-year return). Find your next big winner with StockStory today for free.
