Actuant's Shares Surged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of industrial parts and systems builder Actuant (NYS: ATU) worked their way to a 15.3% intraday gain on heavy volume, then fell back to a still-impressive 7.3% increase.

So what: In this morning's first-quarter report, Actuant beat earnings estimates by 16% on a 4% positive sales surprise. Management followed up by guiding the rest of the year somewhat above Street consensus.

Now what: The company enjoyed at least 12% year-over-year sales growth in its energy and industrial segments, followed by 7% higher core sales in electrical equipment and flat sales of engineered products. The strongest-performing divisions also happen to have the highest profit margins, which is great news for the bottom line. The market is taking this performance as a show of strength from Actuant rather than a sector-boosting improvement in end markets -- rivals Eaton (NYS: ETN) , Kennametal (NYS: KMT) , and Parker Hannifin (NYS: PH) are trading in line with the generally weak market today rather than jumping sky-high. Fun fact: every company mentioned in this story is a five-star CAPS stock (out of five). This might be the perfect time to invest in industrial machinery.

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At the time thisarticle was published Fool contributor Anders Bylund holds no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Actuant and Kennametal. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

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