Fifth Third Bancorp Boosts Stake in Archrock, Inc. $AROC

Key Points

• Fifth Third Bancorp increased its Archrock stake by 81.7% in the first quarter, buying 51,884 additional shares and ending with 115,380 shares valued at about $4.0 million.
• Archrock reported mixed quarterly results, with EPS of $0.42 missing estimates of $0.47 and revenue of $373.77 million slightly below expectations, though revenue still rose 7.7% year over year.
• Insider selling and analyst sentiment were notable: the CFO and an SVP sold shares in May, while analysts currently rate the stock a “Moderate Buy” with a consensus price target of $41.14.

Fifth Third Bancorp lifted its position in Archrock, Inc. (NYSE:AROC - Free Report) by 81.7% in the first quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 115,380 shares of the energy company's stock after purchasing an additional 51,884 shares during the quarter. Fifth Third Bancorp owned approximately 0.07% of Archrock worth $4,015,000 at the end of the most recent quarter.

Several other institutional investors also recently added to or reduced their stakes in the company. Vaughan Nelson Investment Management L.P. purchased a new stake in Archrock in the fourth quarter valued at approximately $61,144,000. Neuberger Berman Group LLC grew its position in shares of Archrock by 9,756.7% during the fourth quarter. Neuberger Berman Group LLC now owns 1,293,002 shares of the energy company's stock worth $33,644,000 after acquiring an additional 1,279,884 shares during the last quarter. Stephens Investment Management Group LLC purchased a new position in shares of Archrock during the fourth quarter worth approximately $32,904,000. Norges Bank acquired a new position in shares of Archrock in the 4th quarter valued at $18,721,000. Finally, Balyasny Asset Management L.P. acquired a new position in shares of Archrock in the 2nd quarter valued at $16,027,000. Institutional investors and hedge funds own 95.45% of the company's stock.

Insider Activity

In related news, CFO Doug S. Aron sold 35,000 shares of the stock in a transaction dated Monday, May 18th. The shares were sold at an average price of $38.30, for a total transaction of $1,340,500.00. Following the completion of the transaction, the chief financial officer directly owned 359,337 shares of the company's stock, valued at $13,762,607.10. This represents a 8.88% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this link. Also, SVP Jason Ingersoll sold 33,000 shares of the stock in a transaction that occurred on Monday, May 18th. The stock was sold at an average price of $38.19, for a total value of $1,260,270.00. Following the transaction, the senior vice president directly owned 277,454 shares of the company's stock, valued at approximately $10,595,968.26. This trade represents a 10.63% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last ninety days, insiders sold 158,000 shares of company stock worth $5,907,370. Insiders own 2.90% of the company's stock.

Archrock Price Performance

Archrock stock opened at $37.10 on Friday. The company has a debt-to-equity ratio of 1.57, a current ratio of 1.41 and a quick ratio of 0.91. The business has a 50 day simple moving average of $37.09 and a 200-day simple moving average of $34.37. Archrock, Inc. has a 12 month low of $21.17 and a 12 month high of $42.23. The stock has a market capitalization of $6.50 billion, a PE ratio of 20.16, a price-to-earnings-growth ratio of 1.63 and a beta of 0.84.

Archrock (NYSE:AROC - Get Free Report) last posted its quarterly earnings data on Tuesday, May 5th. The energy company reported $0.42 earnings per share for the quarter, missing analysts' consensus estimates of $0.47 by ($0.05). The firm had revenue of $373.77 million during the quarter, compared to analysts' expectations of $378.36 million. Archrock had a net margin of 21.45% and a return on equity of 22.89%. The company's revenue for the quarter was up 7.7% on a year-over-year basis. Equities analysts predict that Archrock, Inc. will post 1.9 earnings per share for the current year.

Archrock Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Tuesday, May 19th. Stockholders of record on Tuesday, May 12th were paid a $0.22 dividend. This represents a $0.88 annualized dividend and a dividend yield of 2.4%. The ex-dividend date was Tuesday, May 12th. Archrock's dividend payout ratio (DPR) is 47.83%.

Analyst Upgrades and Downgrades

A number of analysts recently weighed in on AROC shares. Zacks Research cut shares of Archrock from a "strong-buy" rating to a "hold" rating in a research note on Thursday, April 16th. Stifel Nicolaus set a $41.00 price objective on shares of Archrock in a research note on Thursday, May 7th. Citigroup increased their target price on shares of Archrock from $40.00 to $43.00 and gave the stock a "buy" rating in a research note on Wednesday, May 13th. Mizuho raised their price target on Archrock from $38.00 to $40.00 and gave the stock an "outperform" rating in a report on Wednesday, June 3rd. Finally, Weiss Ratings cut Archrock from a "buy (a-)" rating to a "buy (b+)" rating in a research report on Monday, July 13th. Nine research analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the stock. Based on data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $41.14.

Archrock Profile

Archrock, Inc is a Houston‐based provider of natural gas compression services and equipment to the oil and gas industry in North America. Founded in 2004, the company supplies both short‐term rentals and long‐term contracts for compression solutions, serving upstream and midstream producers. Archrock's offerings include engineered compression systems, aftermarket parts, maintenance and field services designed to optimize wellhead and pipeline operations.

The company's core business activities focus on the design, manufacture, rental and sale of gas compression equipment.

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