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Every week, Q.ai highlights a number of stocks in our thematic screen to bring investors insights into some of the best names in various segments, market capitalizations, and industries, courtesy of the Forbes AI Investor platform. And this week in earnings season, industry is the name of the game as we take a look at some of the trendiest U.S. Industrial Stocks on the market – and their quarterly earnings reports.
Q.ai runs factor models daily to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.
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Kansas City Southern (KSU)
Kansas City Southern KSU closed up 0.6% to $271.40 on Friday, closing out the week with 335k trades and a price between the 10- and 22-day averages. The stock is up almost 33% for the year and is trading at 27.9x forward earnings.
Kansas City Southern is a Delaware-registered transportation holding company that specializes in railroad investments in the United States, Mexico, and Panama. Although it’s the smallest of the major North American railroads, it was the subject of a bidding war between two larger rivals, Canadian National and Canadian Pacific, earlier this year.
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While Canadian National won the bidding war, the companies are still waiting on regulatory approval – approval that may not be forthcoming after the White House prepared criticism of railroad mergers in general. In response, Canadian National proposed setting up a trust to buy Kansas City Southern while regulators scrutinize the deal, which the Department of Justice has already recommended be denied, as it makes a “mockery” of the U.S. Surface Transportation Board’s authority.
Thanks in part to these regulatory hurdles faced by Kansas City Southern’s desire to be acquired by Canadian National, the industrial giant has seen its stock price plunge significantly. However, its fundamentals appear solid despite – or perhaps in light of – the pandemic year Revenue was up 6.7% in the last year to $2.6 billion, with operating income seeing gains around 8.2% to $1.04 billion. All told, per-share earnings jumped to $6.54 in the last fiscal year, while return on equity rose to almost 13.6%.
Currently, Kansas City Southern is expected to see around 5.1% revenue growth over the next twelve months. Our AI rates this U.S. Industrial Stock top-notch, with As across the board in Technicals, Growth, Low Volatility Momentum, and Quality Value.
Knight-Swift Transportation Holdings, Inc. (KNX)
Knight-Swift Transportation Holdings, Inc. KNX ticked up almost 0.5% on Friday, ending the week at a share price of $48.37 with 1.65 million trades on the docket. The stock is up 15.7% for the year and currently trades at 11.6x forward earnings.
Knight-Swift is the shipping industry’s largest full truckload carrier, headquartered in Phoenix, Arizona. The company made headlines when it announced on 6 July that is acquired less-than-truckload (LTL) specialist AAA Cooper Transportation in a deal valued around $1.35 billion.
In more recent news, Knight-Swift released its Q2 earnings results on 21 July, posting numbers that by and large surpassed Wall Street expectations. Total revenue came up to $1.315 billion for the quarter, reflecting a 26% increase year-over-year, with $882.6 million alone from trucking operations. Operating income rose, as well, to $191 million, while total operating expenses expanded 17.3% YOY to $1.12 billion.
These numbers thus far reflect growth potential from Knight-Swift’s most recent fiscal year, which saw revenue fall to $4.67 billion compared to $5.34 billion three years prior. Operating income grew in the same period, from $535.6 million to $573 million, with per-share earnings up four cents to $2.40. That said, return on equity slipped from 7.9% to 7.1%.
All told, Knight-Swift Transportation is expected to see around 8.6% revenue growth in the next 12 months. Our AI rates this U.S. Industrial Stock As across the board, too, in Technicals, Growth, Low Volatility Momentum, and Quality Value.
Landstar Systems, Inc. (LSTR)
Landstar Systems, Inc. LSTR jumped 2.2% Friday to $152.54 per share, closing out the day at 270k trades. The stock is down $2 below its 10-day price average and $4 below its 22-day average, though it remains up 13.3% for the year. Landstar Systems is trading at 17.4x forward earnings.
Landstar Systems is a transportation services company that specializes in third-party logistics, notably freight shipping and warehousing. This “asset-light” provider manages and provides a network of independent freight agents, leased owner-operators, and other third-party providers.
The freighter reported an all-time quarterly record in its Q2 2021 earnings, posting a record net income of $92.3 million off quarterly revenue of $1.57 billion, or $2.40 in diluted earnings. At the same time, Landstar declared a quarterly dividend of 25 cents per share, which represents a 4 cent per share increase – the largest ever regularly scheduled quarterly dividend increase in company history.
Over the last fiscal year, Landstar’s revenue grew almost 27% to $4.1 billion, though it’s down from its three-year-ago $4.6 billion revenue. Operating income has likewise fallen in the three-year period from $330.1 million to $268.5 million, with per-share earnings down from $6.18 to $4.98. Meanwhile, return on equity has fallen from 38% to 27.2%.
All things considered, Landstar’s recent excellent record, pitted against its most recent year’s slump and sudden stock plunge, has led our AI to rate this third-party freighter as a mixed bag: A in Technicals and Quality Value and F in Growth and Low Volatility Momentum.
Lincoln Electric Holdings, Inc. (LECO)
Lincoln Electric Holdings, Inc. LECO closed to $135.91 on Friday, a change of 1% for the day and bringing the stock up almost 17% for the year. The stock is trading within a dollar of its 10- and 22-day price averages, and currently trades at 22.5x forward earnings.
Lincoln Electric Holdings is a welding and cutting product designer and manufacturer. This American multinational operates three segments: Americas Welding, International Welding, and The Harris Products Group, producing arc welding equipment, consumables, robotic welding systems, and specialty accessories and fabrication products. The company is expected to post its quarterly earnings before market open on 27 July.
Over the last fiscal year, Lincoln Electric’s revenue grew over 2% to $2.66 billion, though it’s slipped from $3.03 billion three years prior. Operating income fell from $401 million to $319 million in the same period, while per-share earnings plunged nearly a dollar from $4.37 to $3.42. Return on equity fell as well, from 31.5% to 25.6%.
All told, Lincoln Electric’s revenue is expected to grow by 2.8% over the next twelve months. Our AI rates this welding manufacturer A in Technicals, Growth, and Quality Value – though it’s earned a big, fat F in Low Volatility Momentum.
Stanley Black & Decker, Inc. (SWK)
Stanley Black & Decker, Inc. SWK closed up almost 1% on Friday to $204.19 per share. The stock is trading below both the 10- and 22-day price averages of $204.73 and $205.03, respectively, though it remains up almost 14.4% for the year. Currently, Stanley Black & Decker is trading at 18.5x forward earnings.
Stanley Black & Decker is a tools, storage, and industrial supply business. They operate primarily under the BLACK+DECKER brand selling power tools and equipment, as well as some lawn, garden, and home products and accessories. The company is trending ahead of its next quarterly earnings report, which is due before the market opens on Tuesday, 27 July.
Over the last three fiscal years, Stanley Black & Decker saw revenue growth of 11.6% from $13.98 billion to $14.5 billion. Operating income shot up almost 46% in the period from $1.69 billion to $1.96 billion, while per-share earnings almost doubled from $3.99 to $7.77. All told, return on equity jumped from 7.5% to 12.2% in the three-year time span.
Currently, our AI rates this tool retailer A in Technicals and Growth and F in Low Volatility Momentum and Quality Value.
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