What matters to most investors is how much a stock’s price changes over time. Not only can it influence your investment portfolio, but it can also help you compare investment performance across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially in tech giants and popular consumer-focused stocks.
What if you had invested in Applied Industrial Technology (AIT) ten years ago? It may not have been easy to hold on to AIT all this time, but if you did, how much would your investment be worth today?
In-depth business of applied industrial technology
With that in mind, let’s look at the main drivers of Applied Industrial Technologies’ business. Applied Industrial Technologies, Inc. is a distributor of value-added industrial products — including engineered fluid power components, bearings, specialty flow control solutions, power transmission products and various industrial consumables. These products are sold primarily to original equipment manufacturers (OEMs) and maintenance, repair and operations (MRO) customers in Australia, North America, Singapore and New Zealand.
The company is also well known in the market for its engineering, design and system integration services. Moreover, its inventory management solutions and maintenance training services add value to end users in the market. The company, founded in 1923, is currently headquartered in Cleveland, Ohio.
Applied Industrial reports revenue in two business segments — Service Center Based Distribution and Fluid Power & Flow Control. A brief discussion of the segments is provided below:
The service center-based distribution segment (66.5% of net revenues in the second quarter of fiscal 2023) offers various types of industrial products primarily through service centers in New Zealand, Australia and North America.
This segment also provides services to the oil and gas industry, as well as includes rubber shop operations (regional) and rubber service field teams. Service offerings of consumables and application support solutions fall under this segment.
Engineering Solutions (formerly Fluid Power & Flow Control) (33.5%) segment includes specialized regional companies that offer fluid power components, fluid power system assembly and design, and provide equipment repair services. These products and services are marketed directly to end users in the absence of service centers. In addition, the segment deals with flow control system integration, pump repair and others.
Anyone can invest, but building a successful investment portfolio requires a combination of several things: research, patience, and a little risk. So if you invested in Applied Industrial Technology a decade ago, you’re probably feeling pretty good about your investment today.
According to our calculations, a $1,000 investment made in February 2013 would be worth $3,257.73, or a 225.77% return, as of February 1, 2023, and this return excludes dividends but includes price increases.
The S&P 500 rose 172.12% and the price of gold increased 11.12% during the same time period in comparison.
Analysts expect more positive results for AIT. Applied Industrial is poised to capitalize on the enhancement of its product line and value-added services along with healthy cross-selling actions and growth investments. Operational MRO repair activity, sales process initiatives, ongoing price action, robust growth and robust supply chain investments in the US manufacturing sector benefit the service center-based distribution segment. Total revenue growth is expected to be 13-15% (5-9% previously expected) over the previous fiscal year for fiscal 2023. Its shareholder-friendly policies are encouraging. Amid these tailwinds, the company’s stock has outperformed its industry over the past year. However, rising selling, distribution and administrative expenses are impacting Applied Industrial’s performance. Supply chain issues are also a concern. Forex woes are also expected to hurt performance in the near term. Over the past four weeks, the stock has risen 14.64%, and in the past two months, there has been 1 higher earnings estimate revision for fiscal 2023, compared to no lower ones. The consensus estimate has also risen.
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Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
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