What Happened?

Shares of manufacturing company Stanley Black & Decker (NYSE:SWK) fell 11.9% in the morning session after the company reported weak third-quarter earnings results and provided EPS and revenue forecasts for the full year, which fell short of Wall Street's estimates. The weaker top line growth was driven by a blend of slower consumer and automotive production and the recent divestiture (sales) of its Infrastructure business. Overall, this quarter could have been better.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Stanley Black & Decker? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Stanley Black & Decker’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Stanley Black & Decker and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 3 months ago when the stock gained 7.8% on the news that the company reported a "beat and raise" quarter. Stanley Black & Decker blew past analysts' EPS expectations. Its organic revenue also topped Wall Street's estimates. Lastly, the company raised its full-year EPS guidance, which was icing on the cake. However, the company provided cautious comments heading into the second half of the year, adding, "As we look to the back half of 2024, we expect mixed demand trends across our markets." Overall, we think this was a really good quarter that should please shareholders.

Stanley Black & Decker is down 4.7% since the beginning of the year, and at $93.62 per share, it is trading 15% below its 52-week high of $110.13 from September 2024. Investors who bought $1,000 worth of Stanley Black & Decker’s shares 5 years ago would now be looking at an investment worth $607.53.

When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback.