The much looked-for industrial recovery seems to be a little behind
schedule, or at least that's one possible interpretation of weak welding
results from Lincoln Electric (LECO) and Illinois Tool Works (ITW). With Colfax (CFX)
due to report tomorrow (as of this writing), investors will have a more
complete picture of a market segment that often correlates pretty
closely with overall economic activity, but the picture isn't as strong
as analysts and investors had hoped.
Lincoln often trades at a
premium valuation, and with double-digit ROICs in the nine of the last
ten years, it's not hard to see why. With that, I'm tempted to think of
pullbacks in the stock as buying opportunities for long-term investors,
though I recognize the risk that a prolonged period of sluggishness in
welding volume will weaken the stock further.
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Lincoln Electric Comes Up A Little Short Amidst Sluggish Markets
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