BWEN Broadwind Inc

Zacks Investment Research downgraded Broadwind Energy, Inc. (BWEN) to a Zacks Rank #5 (Strong Sell) on May 16, 2014. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of performing worse than the broader market.

Why the Downgrade?

Market sentiments for Broadwind Energy have been weak owing to the disappointing first-quarter 2014 results reported on Apr 30. Since then, the company’s share price has fallen by 20.2% while earnings estimates have been revised downward.

Broadwind Energy reported net loss from continuing operations of 7 cents per share as against the Zacks Consensus Estimate of earnings of 6 cents per share. Revenues grew by 29.2% year over year while costs of sales escalated by 24.6%. Net new orders booked were worth $15.8 million, significantly below $91.9 million worth of orders booked in the year-ago quarter.

In the last 30 days, the Zacks Consensus Estimate for Broadwind Energy has decreased by 7.1% to 39 cents per share for 2014 and by 3.4% to 56 cents per share for 2015.

Lowered earnings estimates as well as a negative 27.3% average earnings surprise for the trailing four quarters have made us dubious about Broadwind Energy’s performance in the coming quarters. Hence, investors seeking exposure to the machinery industry are recommended to either avoid investing in or to dispose off their existing holdings in the company.

Other Stocks to Consider

Broadwind Energy currently has a $158.3 million market capitalization. Some better-ranked stocks in the same industry include Gorman-Rupp Co. (GRC), Blount International Inc. (BLT) and Illinois Tool Works Inc. (ITW). While Gorman-Rupp sports a Zacks Rank #1 (Strong Buy), both Blount International and Illinois Tool Works hold a Zacks Rank #2 (Buy).

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BLOUNT INTL (BLT): Free Stock Analysis Report
 
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