How Do SWK’s Stock Returns Stack up against Competitors’?



Stanley Black & Decker’s stellar record

Century-old industrial (IYJ) company Stanley Black & Decker (SWK) has managed to beat earnings per share estimates for the last eight quarters. Considering that companies miss sales estimates more than they miss earnings per share estimates, Stanley Black & Decker’s record for meeting sales estimates is good as well. The company has managed to beat sales estimates in six of the last eight quarters.

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SWK’s stock performance in 1H16

In the first half of the year, Stanley Black & Decker’s stock returns were better than those of the S&P 500. The stock price increased from $104.87 at the beginning of January to $111.22 by the end of June and returned 6%. Broader-market investors would have earned a 4.3% return from the S&P 500 in the first half of 2016. The SWK stock largely underperformed the S&P 500 in the first quarter, due to a negative surprise in the earnings guidance released in January. However, as seen in the chart above, after the stock upped its earnings guidance in the 1Q16 results, SWK’s returns have been consistently higher than the S&P 500’s.

Stock performance of competitors in 1H16

Among industrial (XLI) competitors in the tools business, Snap-on (SNA) fared poorly with a loss of 6.4% in the first half of 2016. Tyco International (TYC), a security solutions company, gained 34% over its price at the beginning of the year. The remarkable outperformance of Tyco International’s (TYC) stock can be attributed to the merger agreement the company entered into with Johnson Controls (JCI) on January 25, 2016.


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