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report) which stated that after 18 months of restructuring1 Applied
Power was "poised to benefit from an economic recovery in its end
markets" but that "difficult European and Asian markets will likely
keep a lid on stock performance until fiscal 1994." In its April
report, Baird rated the stock of Applied Power (on a scale of 1 to
4) as a "Hold-3, higher risk", meaning a recommendation to hold the
stock.
On June 18, 1993, Baird issued another research note (the
Baird June report) on Applied Power. Baird maintained its Hold-3
rating for Applied Power's stock, but the report noted that Applied
Power's third quarter earnings would exceed Baird's prior estimate.
The report also discussed positive developments for several of the
Applied Power operating divisions. Although cautious with respect
to earnings for the remainder of fiscal 1993 and for the first half
of fiscal 1994, the Baird June report projected that Applied Power
would have significant operating leverage and sharply higher
earnings once its European sales grew.
Standard & Poor's Corp. issued an October 20, 1993, stock
report on Applied Power, giving the stock a B+ ranking. This
report noted Applied Power's increased earnings for the first 9
months of 1993, despite a weakness in worldwide economies. The
1 The Baird April report listed four categories of
positive restructuring moves made by Applied Power during the
previous 18 months: Staffing reductions; consolidation of
marketing and management; discontinuance of a relatively
unproductive business product line; and the strengthening of
senior management.
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