Is Stanley Black & Decker Stock a Buy Now?
Stanley Black & Decker (NYSE: SWK), a seemingly boring industrials stock, has rallied by an astounding 106.5% since bouncing off its March lows. The market doesn't seem to care that the COVID-19 pandemic has thrown a monkey wrench into the tool manufacturer's growth plans, and that it's even suspended its share repurchase program to preserve cash. That sounds like a dire situation, but what if there's more than meets the eye here?
The coronavirus outbreak and ensuing economic slowdown has undeniably hurt demand for Stanley B&D's products. Sales from its primary and largest segment -- tools and storage -- dipped 16% year over year in the second quarter, pulling down the company's total quarterly sales to $3.1 billion. Demand for commercial and industrial tools was hardest hit, although retail and home tools were in high demand. That's just one of the positive trends currently in play, as CEO James Loree revealed during the company's second-quarter earnings conference call:
And while this pandemic has created an incredibly challenging time for all of us, it has also cast a new and very positive light on our portfolio as three powerful trends have emerged, which worked to our significant benefit. First, there's the sudden acceleration in the shift to e-commerce, and then there's a reconnection with the home and garden and a trend toward nesting and DIY; and thirdly, a newfound societal obsession with health and safety, reimagined security.
Source Fool.com
