As conglomerates go, Actuant (ATU)
is more diverse than most and while it is often one of the
largest/leading companies in the sectors in which it competes, it can be
challenging to corroborate the company's performance with its peer
group. Be that as it may, performance has been a little iffy lately
relative to sell-side expectations and the stock has been stuck in a
relatively narrow band for the past year.
Actuant isn't lacking in
ambition, as management intends to use organic/internal development and
M&A to push toward a doubling of the business in five years. That
may well be attainable, but the company's poor history of ROIC
generation lends itself to questions like "growth at what cost?" I do
believe that Actuant is undervalued today, and I like its hydraulic
tools and bolt tightening businesses, but I'd want to see a better path
for margins and returns on capital before thinking of it as a potential
core holding.
Read more here:
Actuant Could Use A Boost To Growth
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