Why Barnes Group Inc. (B) Has Plenty of Upside Potential

It has been reported that multiple insider activity took place at Barnes Group Inc. (B). SVP, Human Resources EDWARDS DAWN N sold 1,750 shares for $80,217 in transaction occurred on 2019/04/30. After making this transaction, SVP, Human Resources owns a direct stake of shares, worth $4,445,614, as per the last closing price. On 2019/03/08 BENANAV GARY G, Director at B, purchased 38 shares at an average price of $56.05 per share. The new stake is valued at $3,015,355.

Director, MANGUM MYLLE H had invested in 37 shares for $11,177 through a trade on 2019/03/08. Following this activity, the insider holds -1 shares worth $619,419 as of recent close.

iShares Core S&P Smallcap ETF revealed as top hedge fund owner in Barnes Group Inc. (B) with a stake of over 2.77M B shares as of March 30, with a market value of approx. $142.53M as of today. The second largest holder, Vanguard Total Stock Market Index Fund, with 1.26M shares which equates to $89.67M worth of the stock. At third is Vanguard Small-Cap Index Fund, which stood pat with 1.24M shares, a 3.1% position in Barnes Group Inc., worth $88.21M. The insider holding in stood at 2.1% while institutions hold 86.5%.

Barnes Group Inc. (NYSE:B) rose 0.4% in recent trade and currently has a stock-market value of $2.85B. The shares finished at $55.42, after trading as low as $54.34 earlier in the session. It hit an intraday high Wednesday at $55.74. Trading activity significantly weakened as the volume at ready counter decreased to 245,508 shares versus 304,020 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 204,868 shares. The stock is now 12.96% above against its bear-market low of $49.06 on December 26, 2018. It has retreated -31.18% since it’s 52-week high of $72.7 reached in September. Now the market price is down -5.57% on the year and up 3.36% YTD.

B stock’s 50 day simple moving average (SMA 50) price is $54.5 and its 200-day simple moving average (SMA 200) price is $59.64. The company’s stock currently has a total float of 47.08M shares. Its weekly volatility is hovering around 2.24% and felt 2.34% volatility in price over a month. On the upside, the share price will test short term resistance at around $55.99. On a downside, the stock is likely to find some support, which begins at $54.59. The failure to get near-term support could push it to $53.77.

It had seen a negative analyst call from UBS, which downgraded the stock from Buy to Neutral on February 15. Analysts at Sidoti, shed their negative views on January 02 by lifting it fromNeutral to Buy. Analysts at DA Davidson, made their first call about the stock on May 18, recommending it is Neutral.

When looking at valuations, Barnes Group Inc. (B) has a cheap P/E of 17.72x as compared to industry average of 24.83x. Moreover, it trades for 15.41 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 2.34x price/book and 1.89x price/sales. Compared to others, Barnes Group Inc. is in a different league with regards to profitability, having net margins of 10.7%. To put some perspective around this, the industry’s average net margin is 13.64%. B’s ROE is 13.4%, which is also considerably better than the industry’s ROE of 10.91%. It’s also very liquid in the near term, with a current ratio of 2.2. The stock has a debt/capital of 0.74.

Shares of B have gained 4.4% since the company’s most recent earnings report. Over the past 12 fiscal quarters, Barnes Group Inc. (NYSE:B) has topped consensus earnings estimates in 10 quarters (83%), missed earnings in 2 quarters (16%), whereas at 0 occasion EPS met analyst expectations. B last reported earnings that exceeded expectations. The company raked in $0.71 per share, -76.95% change on the same period last year. That was better than consensus for $0.69. Revenue for the recent quarter stood at $376.69 million, up 3% on last year and above the $374.04 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $384 million to $392.5 million, which should be compared with $397.79 million generated last year. EPS is seen in a range of $0.76 to $0.8, against the $0.82 reported a year ago.