Momentum Stock Watch: Meritor, Inc. (MTOR)

Company Profile:

Meritor, Inc. designs, develops, manufactures, markets, distributes, sells, services, and supports integrated systems, modules, and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation, and industrial sectors. It operates through two segments, Commercial Truck & Industrial; and Aftermarket & Trailer. The Commercial Truck & Industrial segment supplies drivetrain systems and components. The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts, and other replacement and remanufactured parts to commercial vehicle aftermarket customers. The company was formerly known as ArvinMeritor, Inc. and changed its name to Meritor, Inc. in March 2011. Meritor, Inc. was founded in 1921 and is headquartered in Troy, Michigan.

Recent News:

The company is notifying holders of its 7.875% Convertible Senior Notes due 2026 that they are entitled to convert all or a portion of their Notes at any time beginning July 2, 2018 and prior to the close of business on September 28, 2018 at a rate of 83.3333 shares of common stock per $1,000 principal amount at maturity of the Notes.

For the second quarter of fiscal year 2018, Meritor posted sales of $1,066 million, up $260 million or approximately 32 percent, from the same period last year. Net income attributable to the company and net income from continuing operations attributable to the company were $57 million, or $0.63 per diluted share, compared to $22 million, or $0.24 per diluted share, in the same period last year.

 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

MTOR’s strengths can be seen in its strong growth, robust profitability and better efficiency compared with its peers. Technical indicators signal the bullish signs, as there is a bullish crossover in MACD and stochastic oscillator. The RSI (14) stands at 58.40 with positive bias. We rate Meritor, Inc. (MTOR) a STRONG BUY.

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