With shares of Eaton Corporation (NYSE:ETN) trading at around $56.31, is ETN an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Eaton has had its ups and downs through the years, but over the long haul, it’s a winner. The last three years have been phenomenal, and solid dividend payments have been an added bonus. Currently, Eaton yields 2.80 percent.
The acquisition of Cooper Industries for $11.80 billion seemed a little steep to many investors, but it should be a good long-term investment. The world needs energy, and Cooper Industries is an electrical equipment maker that operates on a global scale.
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Eaton also recently landed a deal with Southwest Airlines (NYSE:LUV) in which Eaton will provide hydraulic equipment service and maintenance for all 737s.
These deals will lead to increased growth. Another positive is that CEO Alexander Cutler had cut projections in 2013 due to fiscal cliff concerns. Now that a deal has been reached, Eaton is set up to beat expectations. Furthermore, ISI Group, Bank of America Corporation (NYSE:BAC), and J.P. Morgan Chase & Co. (NYSE:JPM) are all bullish on the company.
As far as insiders go, there were two large sales on December 9th and 10th. However, these insiders are likely unhappy about those decisions at the current time.
Let’s take a look at some important numbers for Eaton.