Based on fourth quarter results, I would argue that Eaton (NYSE:ETN) belongs on that list of diversified industrials that are doing pretty well given the circumstances (a list that includes 3M (NYSE:MMM), Honeywell (NYSE:HON), and arguably Parker-Hannifin (NYSE:PH)).
The company's exposure to off-road vehicles and oil/gas will be
liabilities in 2015, but exposure to aerospace and vehicles should
offset it and Eaton's leverage to construction should also be a net
positive.
I don't expect to find large, well-covered stocks like
Eaton trading at major discounts to fair value and I don't believe that
is the case here. That said, I like Eaton's prospects for "self-help"
through margin leverage and asset leverage and I think these shares are
slightly undervalued today.
Follow this link for the full article:
Realistic Expectations And Improving Performance At Eaton
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