Trimble Stock to Gain From Secular Growth Trends
Today’s stock relates to an investing strategy that we have been writing about for a long while now. Companies that provide innovative solutions to other enterprises in the digital era stand to provide superlative returns to their investors.
There are many companies trying to bridge this divide and profit from the ongoing digital transformation, and some have proven track record. Trimble Inc (NASDAQ:TRMB) aims to transform the way the world works by building products that connect the physical and digital worlds.
Best known for its global positioning system (GPS) technology, Trimble integrates a wide range of technologies, including optical, laser, and inertial technologies—together with application software, wireless communications, and other services.
The company’s software, hardware, and services are transforming a broad range of industries such as agriculture, construction, and transportation. Trimble is a dominating player in providing technology solutions that enable field mobile workers and professionals to improve their work processes.
Trimble has over 80 percent of the top 25 building contractors and 100 percent of the top 10 civil contractors in North America as its customers. Strong market penetration and a growing business has pushed TRMB stock higher in the last year.
One of Trimble’s products is equipment that automates tractors and bulldozers. Other products include integrated systems that track fleets of vehicles and workers and provide real-time information and analytics.
The company provides software solutions that connect all aspects of a construction site, including building information modelling (BIM) software that is used throughout the different stages of designing, building, and operating buildings.
The future appears bright for Trimble stock. Construction spending in the United States is projected to exceed $1.4 trillion in 2021. (Source: “Forecast for new construction put in place in the U.S. from 2011 to 2021 (in billion U.S. dollars,” Statista, last accessed February 22, 2018.)
Markets like construction, agriculture, and transportation are undergoing a productivity revolution and are witnessing increased usage of machine control automation. This represents a step toward complete machine autonomy and a revamp of the traditional work processes.
Trimble is well-positioned to play a leading role in this emerging sector. As digitization and automation continue to make inroads into these mature industries, TRMB stock should benefit.
Trimble has reported several quarters of growth. The company announced impressive fourth-quarter and full-year 2017 results early this month. Quarterly revenue increased by 21% year-over-year to $708.4 million.
CEO Steven W. Berglund said that every segment and every region grew in the fourth quarter. “We enter 2018 with continuing momentum and anticipate further growth and improved operating margins.” (Source: “Trimble Reports Fourth Quarter and Full Year 2017 Results,” Trimble Inc, February 8, 2018.)
Trimble stock has gone up by almost 23% in the last year, which is almost at par with its five-year gains.
Chart courtesy of StockCharts.com
Trimble Stock is likely to continue going up because its core markets are huge global industries that are under-penetrated by technology. The company‘s extensive knowledge should continue to give it a competitive edge.
Trimble’s mission is to transform the way the world works by revamping old work processes and making them more efficient. Its integrated solutions allow businesses to collect, manage, and analyze complex information faster in order to enhance productivity.
Rising connectivity among humans and machines is one of the key trends of the digital age. Companies like Trimble are in a position to make the most of this opportunity. Since demand for the company’s products and solutions is expected to continue going up, the TRMB stock price is likely to go higher.