Thursday, March 20, 2014

Seeking Alpha: Actuant Could Use A Boost To Growth

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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