Today we have shortlisted 8 U.S. industrial stocks that have
reported high free cash flow to firm during their trailing 12-month periods. These stocks also have high leverage (D/E) for the latest quarter compared to the industry average**. By using the high levels of FCFF, these companies could retire the debt and reduce the risk associated with debt thereby enhancing returns to equity holders. Moreover, these stocks are expected to report strong ROE estimates for fiscal year 2014. During the past one month, majority of the stocks have registered price gains with daily average trading volumes in excess of 100,000.
|
Company Name |
Ticker |
Exchange |
Market Cap |
Last Price |
Average Volume |
Price Change (1-Month) |
Total Debt to Total Equity in % |
TTM FCFF* in Millions |
ROE 2014(E) |
|
Atlas Air Worldwide Holdings Inc |
AAWW |
NASDAQ |
1,157.7 |
46.67 |
276,042 |
11.9% |
147.3 |
394.9 |
6.5% |
|
Generac Holdings Inc |
GNRC |
NYSE |
3,140.4 |
45.60 |
1,283,012 |
11.6% |
248.3 |
238.5 |
45.3% |
|
USG Corp |
USG |
NYSE |
4,114.7 |
28.43 |
966,634 |
2.2% |
288.5 |
224.0 |
23.5% |
|
Trinity Industries Inc |
TRN |
NYSE |
4,684.7 |
30.10 |
3,361,642 |
-15.7% |
108.9 |
220.9 |
25.6% |
|
Mueller Water Products Inc |
MWA |
NYSE |
1,616.5 |
10.11 |
1,237,335 |
3.3% |
155.2 |
148.5 |
16.9% |
|
Manitowoc Co Inc/The |
MTW |
NYSE |
2,530.2 |
18.67 |
2,242,335 |
-11.6% |
199.9 |
133.9 |
19.4% |
|
DXP Enterprises Inc |
DXPE |
NASDAQ |
734.4 |
50.77 |
177,949 |
-22.6% |
132.8 |
74.9 |
20.8% |
|
Blount International Inc |
BLT |
NYSE |
846.5 |
17.13 |
607,574 |
6.1% |
199.2 |
68.4 |
21.7% |
Source: Bloomberg
*TTM FCFF: Trailing Twelve Months Free Cash Flow to firm
** We used “S&P 500 Industrials Sector Index GICS Level 1” as a proxy for the industry. The average leverage (D/E) of the industry is 105.9% for the latest quarter.
Company Description
Atlas Air Worldwide Holdings Inc (NASDAQ: AAWW)
Atlas Air Worldwide Holdings, Inc. is the parent company of Atlas Air, Inc., and Polar Air Cargo, Inc. Atlas provides aircraft, crew, maintenance, and insurance freighter aircraft to major airlines around the world. Polar operates a global, scheduled-service network and serves substantially all major trade lanes of the world. The company also provides commercial and military charter services.
Generac Holdings Inc (NYSE: GNRC)
Generac Holdings, Inc. manufactures automatic, stationary standby and portable generators. The company’s generators serve the residential, commercial, industrial and telecommunications markets.
USG Corp (NYSE: USG)
USG Corporation, through its subsidiaries, manufactures and distributes building materials. The company produces a wide range of products for use in new residential, new non-residential, and repair and remodel construction, as well as products used in certain industrial processes. USG’s two core businesses include North American Gypsum and Worldwide Ceilings.
Trinity Industries Inc (NYSE: TRN)
Trinity Industries, Inc. manufactures transportation, construction, and industrial products. The company’s products include tank and freight railcars, inland hopper and tank barges, highway guardrail and safety products, ready-mix concrete, and other products. Trinity also leases railcars and other products. The company markets its products in the United States and internationally.
Mueller Water Products Inc (NYSE: MWA)
Mueller Water Products, Inc. manufactures a broad range of water infrastructure and flow control products for use in water distribution networks, water and wastewater treatment facilities, gas distribution systems and fire protection piping systems. The company’s product portfolio includes engineered valves, hydrants, pipe fittings and ductile iron pipe.
Manitowoc Co Inc/The (NYSE: MTW)
The Manitowoc Company, Inc. is a diversified industrial manufacturer of cranes and related products and foodservice equipment. The company’s products include lattice-boom cranes, tower cranes, mobile telescopic cranes, and boom trucks as well as ice making machines, refrigerators, and freezers.
DXP Enterprises Inc (NASDAQ: DXPE)
DXP Enterprises, Inc. provides maintenance, repair, and operating products, equipment, and services to industrial customers. The company provides fluid handling equipment, power transmission equipment, general mill and safety supplies, and electrical products.
Blount International Inc (NYSE: BLT)
Blount International, Inc. manufactures outdoor products and industrial and power equipment. The company’s products include lawn mowers and related accessories, timber harvesting and processing equipment, and stacked material loaders. Blount sells its products around the world.
