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Badger Meter Hits 52-Week High on Large Metering Projects


Shares of Badger Meter, Inc. BMI scaled a 52-week high of $50.90 on Oct 9, eventually closing nominally lower at $50.65.

Badger Meter has a market cap of $1.5 billion. Average volume of shares traded over the last three months is approximately 96.1K. We note that the company has beaten the Zacks Consensus Estimate in two out of the trailing four quarters, the average positive earnings surprise being 0.11%.

Notably, the stock has gained 51.6% over the last year, higher than the S&P 500’s gain of 17.6%. Badger Meter has also outperformed the industry’s gain of 27.3% in a year’s time with respect to share price movement.

Further, Badger Meter carries a Zacks Rank #3 (Hold). The company has an impressive Growth Style Score of B. Our Growth Style Score highlights all the vital metrics of a company’s financials to obtain a clearer picture of the quality and sustainability of its growth. Our research shows that stocks with Style Scores of A or B, when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3, offer the best investment opportunities.

What's Driving Badger Meter?

Badger Meter remains focused on numerous large city projects which are still in the bidding process. With these types of projects on the horizon and the consistent strength of its water meters, radios and software, the company anticipates municipal sales growth in the near future. Further, the company remains optimistic about long-awaited rebound in flow instrumentation, particularly in the oil and gas business.

Badger Meter also anticipates that the continued strength of its core water meter business, led by the latest products and recovery in the flow instrumentation business, will stoke growth. Furthermore, it continues to see opportunities in the Middle East for ultrasonic water meters. Additionally, it is well positioned to gain from acceleration in large metering projects.

During second-quarter 2017, Badger Meter acquired D-Flow Technology AB of Luleå, Sweden. The acquisition will help Badger Meter further enhance its successful E-Series Ultrasonic product line, lower production costs and provide a platform for further advancement of ultrasonic capabilities. Further acquisitions will drive the company’s growth.

Notably, the company’s margin performance will be assisted by cost-reduction efforts made last year in the flow instrumentation area. Furthermore, in the municipal water markets, Badger Meter is maintaining strong pricing structure by not participating in low-margin opportunities. Also, its distribution consolidation strategy will drive margin in the near term.

Also, the company’s cost-containment efforts and strong pricing structure continue to enhance competitive advantage, while driving profitable growth and improving returns.

All these measures probably raised investors’ confidence and are anticipated to boost the company’s share price in the days ahead.

In addition, 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 Badger Meter have moved up in the past 90 days, reflecting analysts’ bullish outlook. The earnings estimate for 2017 has gone up 5%, while that of 2018 moved up 6%.

Badger Meter, Inc. Price and Consensus

Badger Meter, Inc. Price and Consensus | Badger Meter, Inc. Quote

Stocks to Consider

Better-ranked stocks in the same sector are Applied Materials, Inc. AMAT, América Móvil, S.A.B. de C.V. AMX and Canon Inc. CAJ. All three stocks flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Materials has an expected long-term earnings growth rate of 17.1%.

América Móvil has an expected long-term earnings growth rate of 55.9%.

Canon has an expected long-term earnings growth rate of 3%.

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