Helios Technology NASDAQ: HLIO
, which develops and manufactures hydraulic and electronic control solutions for various markets, has notched a year-to-date return of 70.18%.
Sarasota, Florida-based Helios is hovering just on the cusp between small- and mid-cap, with a market capitalization of $2.9 billion. Its products for the hydraulics markets include cartridge valves, manifolds and other packaging solutions. It also serves the electronics and water industries.
The stock has been finding support along its 50-day moving average since rebounding in July after a failed cup-with-handle breakout.
The stock cleared a handle buy point above $79.06 in June, but skidded 8% below that point, to a low of $72.51 on July 19. Since then, the stock is up 24%, trading Wednesday near $90.
Both earnings and revenue accelerated in the past two quarters.
For the most recent quarter, the company earned $1.20 per share on revenue of $223.4 million. Those were year-over-year increases of 118% and 87%, respectively.
Earnings trounced views of $0.86 per share, according to MarketBeat data. Revenue also topped views of $187.17 million. The company beat top- and bottom-line expectations in the past eight quarters.
That's despite declines in earnings and revenue in 2020. The company reported earnings of $2.34 per share last year, down from $2.43 in 2019.
For the full year of 2021, analysts expect Helios to earn $3.75 per share, a gain of 67%. That's seen growing another 9% in 2022, to $4.09 per share.
Double-Digit Organic Growth
In its most recent earnings report, the company cited strong organic growth for its strength.
In a statement, CEO Josef Matosevic said, "We delivered excellent results in the quarter on all levels. The Helios team is executing very well on our plans to drive organic growth, generate cash, deliver top tier adjusted EBITDA margins and meet the accelerated goal that we recently outlined at our investor day to achieve $1 billion in revenue two years earlier than planned, by 2023."
In the most recent quarter, the organic growth rate was 37%.
Matosevic cited other significant developments, including operating efficiencies that are improving the bottom line.
"This helped drive solid operating and EBITDA margin expansion. In fact, we posted the best margin results we have had in three years," he said.
Operating margin in the quarter was 18.8%, up from 14% in the year-ago quarter.
Targeted Pricing Strategies In Place
Of course, supply-chain issues came up as well.
Matosevic noted that the company is implementing targeted pricing strategies "to help offset the continuing supply chain headwinds that the industry is facing, including higher freight cost, raw material price increases and shortages of components."
The company recently closed the acquisition of NEM, which Matosevic called "an innovative hydraulics solution company providing customers material handling, construction, industrial vehicle and ag applications to its global OEM customer base."
On October 11, Helios announced that it acquired assets related to the electronic control systems and parts business of Shenzhen Joyonway Electronics & Technology and its related entities.
Joyonway is a fast-growing developer of control panels, software, systems and accessories for the health and wellness industry. It operates in Shenzhen and Dongguan, China.
Helios' three-year growth metrics are as follows:
Operating Income 2.48%
Net Income -23.34%
Diluted EPS -27.82%
Return on Assets 6.13%
Return on Equity 11.72%
Return on Invested Capital 8.72%
Net Margin 10.22%
The decrease in net income and earnings per share was due to the decline in profitability in 2020.
Earlier this month, the company announced it was transferring its listing from the Nasdaq Global Select Market to the New York Stock Exchange, effective November 1.
"The move to the NYSE is a planned milestone along our strategic journey, which we expect will provide long-term value for our shareholders," said Matosevic.
The company reports its third-quarter on November 8, before the opening bell. Analysts expect earnings per share to come in at $0.82 on revenue of $200.73 million. Those would mark gains on both the top and bottom lines.
Before you consider Helios Technologies, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Helios Technologies wasn't on the list.
While Helios Technologies currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Click the link below and we'll send you MarketBeat's list of the 10 best stocks to own in 2024 and why they should be in your portfolio. Get This Free Report