The outlook for the construction and mining industries hasn't gotten much better, and with that both Caterpillar (NYSE:CAT) and Komatsu (OTCPK:KMTUY)
have posted pretty uninspiring performances. While the environment for
mining equipment is still under pressure from weak prices and shrinking
capex budgets, and the construction market in key Komatsu markets like
China and Japan is hardly great, Komatsu is investing in long-term
innovation, maintaining a focus on margins, and positioning itself for
the eventual recovery.
Since my last piece on Komtasu, these shares have outperformed Caterpillar, Joy Global (NYSE:JOY) and Terex (NYSE:TEX)
by a pretty healthy margin. Although Komatsu isn't particularly
well-positioned for a construction recovery in North America (or
Europe), a turnaround in the emerging markets would be a different
story. I don't think investors need to rush to buy this stock, but the
valuation isn't too bad and I think the company's emphasis on its more
lucrative parts/service operations and long-term innovation could pay
dividends down the road.
Read more here:
Is It Time To Start Thinking Recovery For Komatsu?
No comments:
Post a Comment