Trimble Navigation Ltd. TRMB recently acquired a privately-held fleet management provider, Veltec.

The financial details of the deal have been still kept under wraps.

Headquartered in Londrina, Brazil, Veltec delivers improved safety solutions to the transportation companies, thus reducing operational costs, increasing visibility and enhancing fleet performance.

The company’s fleet mobility platform includes in-vehicle devices as well as back office software. These solutions help the fleets to reduce accidents, improve driver and vehicle performance, as well as increase fuel economy.

On a year-to-date basis, shares of Trimble have lost 4% against the industry’s growth of 2.4%.



How Will the buyout Aid Trimble?

Acquisitions have helped Trimble to build a comprehensive portfolio, enter new markets and generate additional revenues.

The acquisition, effective immediately, will enhance Trimble’s capabilities to serve customers in the transportation and logistics business. The deal will focus on advanced technologies and implementation solutions for better fleet management.

In addition, the Veltec buyout will further expand Trimble’s market share on a global basis, extending its fleet safety and efficiency solutions to new markets.

Post-acquisition, Veltec’s businesses will become part of Trimble’s Transportation Segment. In the last reported quarter, sales from this segment went up 11.5% to $181.8 million, accounting for 23.1% of the total revenues. The company experienced positive contributions from ALK Technologies, which substantially contributed to the results of this segment. The deal will further expand its revenues in this segment.

Bottom Line

The acquisitions are part of Trimble’s bid to expand international business, while sustaining its focus on commercial applications. These, being more macro-sensitive, provide a stable revenue stream and better profits.

These acquisitions are small compared to Trimble, so there have been no integration issues. Instead, the acquisitions facilitated market expansion and buildup of revenues. The company also forms joint ventures to build positions in strategic areas. We expect the acquisitions to remain an important growth driver.

Trimble Inc. Price and Consensus


Trimble Inc. Price and Consensus | Trimble Inc. Quote

Zacks Rank & Other Stocks to Consider

Currently, Trimble has a Zacks Rank #2 (Buy). Other top-ranked stocks in the technology sector include eXp World Holdings, Inc. EXPI, Universal Electronics Inc. UEIC and Internap Corporation INAP, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for eXp World Holdings, Universal Electronics and Internap is currently projected to be 10%, 15% and 2%, respectively.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we’re targeting>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Internap Corporation (INAP): Free Stock Analysis Report
Universal Electronics Inc. (UEIC): Free Stock Analysis Report
Trimble Inc. (TRMB): Free Stock Analysis Report
Exp World Holdings, Inc. (EXPI): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research