Thursday, July 3, 2014

Seeking Alpha: Atlas Copco Is Great Everywhere But In Value

Sweden's Atlas Copco (OTCPK:ATLKY) has long been one of my favorite industrial companies, and it remains so today. The shares have done so-so since I last wrote about them for Seeking Alpha; hit by the severe downturn in mining, the shares are up about 20% over that stretch - roughly on par with Caterpillar (CAT) and better than Sandvik (OTCPK:SDVKY), but only about half the returns of Ingersoll-Rand (IR) or the S&P 500.

Even with that underperformance, and even though I like the company, I'm not as bullish on the shares as I wish I could be. Mining likely is troughing, but even an estimate for 10% future annual free cash flow growth only gets me to about par with today's share price. I would definitely keep this name on a watchlist and stay alert for pullbacks (the shares rarely get very cheap and the windows don't stay open for long), but today's valuation seems pretty fair to me.

Read more here:
Atlas Copco Is Great Everywhere But In Value

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