Why Now Is The Perfect Time to Buy Allient (ALNT) Stock

Allient (NASDAQ: ALNT) is a $1.1 billion business that builds precision motion-control technology — essentially, enabling the precise movement that is necessary for modern automation.

Almost exactly 1 year ago, ALNT shares started a strong upward climb, after having spent the preceding 4 years struggling to make any significant breakthroughs. In the last 365 days, the stock has surged by almost 180%. The best time to buy it, obviously, was a year ago — the second-best moment, despite that rally, is now. Here’s why…

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First, let’s take a look at the stock’s fundamentals — and then we’ll turn to catalysts. 

Our in-house quant rating system evaluates 4,600 stocks on the basis of 115 metrics and factors. Those findings are distilled into a single metric — a stock’s Zen Rating. The top 5% of stocks are given a Zen Rating of A, equivalent to a Strong Buy rating — and stocks with that distinction have provided an average annual return of 32.52% since the early 2000s.

ALNT has a Zen Rating of A — moreover, it ranks in the top 1% of all the stocks that we track, and is currently rated 7th overall.

To get a better overview of what Allient’s strong suits are, we need to look at the 7 Component Grade ratings that come together to make up each stock’s Zen Rating.

Growth is ALNT’s strongest rating — based on 22 different growth factors, the stock ranks in the 96th percentile in this category — equivalent to or better than 96% of stocks, or, in other words, the top 4%. Margins have expanded from 2.5% to 4% in the last year, and analysts are expecting earnings to grow at a pace of 34.59% per year.

The other A rating that Allient shares have is Safety. This is a measure of how predictable and stable revenue inflows are, and how predictable a company’s earnings are. Here, ALNT also ranks in the top 4%.

On account of that year-long and continuing rally, the stock also ranks in the 91st percentile for Momentum. Thanks to a strong balance sheet, shrinking debt, and a hefty war-chest of short-term assets that far outpace its short and long-term liabilities, Allient is also in the 92nd percentile in terms of Financials.

ALNT is also the top-rated stock out of 34 in the Electronic Component industry, which has an Industry Rating of A. In fact, out of the 145 industries that we track, this one ranks 14th overall — so we’re talking about a dominant position in a very strong field.

The last item on our fundamentals checklist is the valuation. As I’m writing this, the stock is trading at 49.43x trailing earnings. However, it’s also trading at a much more appealing 27.25x forward earnings. That isn’t super-cheap — but it does place the stock in the top 22% for the Value Component Grade rating, which is more than just a fair showing when you factor in all the other strengths that it has.

Alright — we’re done with the fundamentals. Let’s get back to our original premise — why is now the best time to buy ALNT? The company crushed earnings on March 5 — earnings per share (EPS) came in at $0.55 versus analyst estimates of $0.45, marking the 6th consecutive quarter of outpacing analyst estimates. Revenue also beat expectations.

And what happened after that? Profit taking — the stock dipped by a little over 4%. The fundamentals are there — that dip is a nice discount, and it won’t last.

Let’s bring it all together. We have a proven history of execution as well as momentum. The company stands to benefit from a myriad of secular trends through automation. The balance sheet is both healthy and improving. The growth prospects are there, and the price is appealing. What’s not to like? 

—> Click here to research ALNT

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