Value investors have nightmares about stocks like Westinghouse Air Brake Technologies (NYSE:WAB)
(or Wabtec). The shares are expensive by most conventional metrics, but
the company has roughly doubled its margins over the past decade and
only scratched the surface of its market share opportunities outside of
North America. Skilled at both product development and M&A, Wabtec
has tied itself to the ongoing growth and use of both freight and
transit rail - arguably as close as you can get to a sure thing in the
industrial world.
Valuation remains a challenge
when it comes to this stock. On one hand, projecting double-digit
annualized revenue growth for a company that is already generating more
than $3 billion a year in revenue and has more than 50% share in its
core market is aggressive. On the other hand, while replicating such
impressive share outside of North America is by no means guaranteed,
getting only half that would still be more than enough to support
10%-plus revenue growth.
Read more here:
Wabtec Looking To Leverage Mandates And Grab Foreign Share
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