3-D Printing Sector Ideas

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>>> Why Shares in Trimble Rose 10% in August

One of Cathie Wood's favorite stocks outperformed last month.


Motley Fool

by Lee Samaha

Sep 3, 2021


https://www.fool.com/investing/2021/09/03/why-shares-in-trimble-rose-10-in-august/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Key Points

The future looks bright for this technology play.

What happened

Shares in positioning technology company Trimble (NASDAQ:TRMB) rose 10.2% in August, according to data provided by S&P Global Market Intelligence. The move comes on the back of a couple of positive pieces of news flow. The first was an excellent set of second-quarter earnings released at the start of the month. More on that in a moment.

The second was the announcement on Aug. 19 of a new $750 million share repurchase program. Investors often see share repurchase authorizations positively for stock prices as company buying provides underlying support for the stock.

In the earnings report, management declared it had exceeded expectations in the second quarter and promptly raised revenue and earnings guidance for the second time this year. Management started the year forecasting full-year adjusted earnings per share of $2.25-$2.45, and then raised its guidance to $2.30-$2.50 on the first-quarter earnings call and then again to $2.45-$2.65 on the second-quarter earnings call.

So what

The good news on earnings and guidance demonstrates the recovery in many of Trimble's end markets in 2021. As a reminder, Trimble's positioning technology precisely positions and models customers' physical assets or activities. Key end markets include the geospatial industry (mapping, etc.), transportation (real-time tracking of truck fleets, etc.), buildings and infrastructure (construction), and resources and utilities.

All four segments grew strongly in the second quarter leading to the company reporting an overall 27% increase in organic sales in the quarter.

Now what

With Trimble's end markets now firmly in recovery mode, investors can look forward to the company developing its long-term growth aims. These include becoming an integrated part of its customers' daily workflow and consequently growing its software and recurring revenue. Meanwhile, advancements in software and analytics (for example, in precision agriculture) will open up new markets and applications and increase the value of Trimble's hardware and software solutions.

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