Fiera Capital Corp, a global asset management firm headquartered in Montreal, recently reduced its stake in shares of Xylem Inc. by 7.8%. This decision, disclosed in the company’s most recent 13F filing with the Securities & Exchange Commission, means that Fiera Capital Corp now owns 39,797 shares of Xylem’s stock after selling 3,350 shares during the fourth quarter. The value of these holdings was $4,400,000 at the end of the most recent reporting period.
Xylem Inc. is an established leader in providing cutting-edge engineered technologies for the water industry. Operating across three different business segments – Water Infrastructure, Applied Water and Measurement and Control Solutions – Xylem offers solutions which focus on transport, treatment and testing of water.
However, despite being a reputable company with an impressive track record to date, several research firms have voiced concerns regarding Xylem’s future performance capabilities. Leading agency TheStreet cut their rating for Xylem from ‘b’ to ‘c+’ in a report issued on May 10th – citing underperformance as their primary reason for downgrade. Others have chosen to remain neutral towards future price movement; Citigroup slashed their target price from $123 to $121 on February 8th while StockNews.com issued a “hold” rating on March 16th. On the other hand Cowen upgraded Xylem from a “hold” rating to “outperform” with target price revised upwards from $115 to $120 couple of months later on February 14th based on solid growth prospects while Stifel Nicolaus opted for purchase on Janurary24th by upgrading them from “hold” rating to “buy,” setting their new target price at around$124.
Despite mixed viewpoints held among experts within this market sector – one investment analyst has rated the stock as ‘sell,’ while six others have given it a ‘hold’ rating and an additional six have assigned a buy rating to Xylem’s stock – the piece of information which should capture an investor’s attention is the company’s average rating of “Hold” and consensus target price of $114.80 as per recent data from Bloomberg.
As investors start to look for opportunities in this space, it remains to be seen how Xylem’s prospects will develop over coming months and years.
Xylem: A Solid Investment Choice for Equity Investors
Xylem Continues to be a Favored Choice Among Hedge Funds and Investors
Xylem, the water industry technology company, has attracted considerable interest from institutional investors in recent months. In fact, according to recent filings with the Securities and Exchange Commission (SEC), 83.57% of Xylem’s shares are currently owned by institutional investors.
TCI Wealth Advisors Inc., Hexagon Capital Partners LLC, Guardian Wealth Advisors LLC, Parkside Financial Bank & Trust, and Affiance Financial LLC have all boosted their positions in Xylem. TCI Wealth Advisors alone increased its position by 583.3% in Q3 of the previous year.
Notably, corporate insiders have also been trading the stock recently. Xylem CEO Patrick Decker sold over $5 million worth of shares on March 13th at an average price of $98.19 per share and now owns more than 287,000 shares. Hayati Yarkadas SVP sold over $1.6 million worth of stock on March 2nd at an average price of $100.43 per share.
Despite trends among institutional investors and insider selling activity, Xylem remains a solid choice for equity investors due to its product line that is designed to transport and process water as well as measuring and controlling solutions across various end-markets globally.
Xylem’s Q1 results released on May 4th drove home this point recording EPS of $0.72 outperforming forecast estimates by $0.10 with revenue increasing 13.8% YoY for Q1.
The company also generated net cash flow from operating activities totaling $66 million; up approximately $29 million YoY driven by earnings growth along with adjustments made to working capital during the period.
Despite a current PE ratio of 52.36 indicating an expensive buy but a forward P/E ratio currently at a modest 18.12, analysts forecast that Xylem’s EPS will experience a steady rise over the coming years making it an attractive longer-term investment option for shareholders given that institutional investors continue to remain bullish on the outlook of the company.
Investors who may have missed out on Xylem’s rallies may consider exploring the stock as a long-term value opportunity.
Xylem’s five-year performance in relation to index benchmarks highlights its ability to deliver returns for those with longer-term objectives – the S&P 500 yielding 31% while Xylem returned 43%. With a current market cap of $19.39 billion, Xylem appears well-positioned to increase this ratio via growth opportunities and acquisitions within what is still a very solid core industry sector despite broader liquidity issues amidst external economic pressures such as COVID-19.
Overall, Xylem continues to hold promise among investors and analysts alike due to its strong operational capabilities coupled with significant institutional investment support in Q1 of this year particularly emphasized by TCI Wealth Advisors who increased their holdings by more than five-fold over similar periods. With strong Q1 results also under its belt, there seems little reason why Xylem can’t deliver further gains over upcoming quarters.
