I closed my last article on Dover (NYSE:DOV)
with the admonition that "how much worse can it get?" are maybe the
most dangerous words in investing (although "it's different this time"
is a top contender). Dover hasn't been a disaster since then; the shares
are down about 8% and on par with Emerson (NYSE:EMR),
but investors are right to wonder why management has apparently
misestimated the scope of the energy decline. What's more, it would seem
that opportunities like "close the case" in refrigeration aren't quite
what they were cracked up to be.
I don't think that Dover is a bad
or broken company, but I do think it is at least fair to ask whether
this is a particularly well-run conglomerate. Valuation isn't demanding
at this level, but energy could be weaker for longer, and there are some
areas of concern in multiple industrial markets. Patient investors will
probably do alright with Dover, but General Electric (NYSE:GE), Eaton (NYSE:ETN), and Honeywell (NYSE:HON) all seem undervalued to varying degrees and are at least worth a look before committing to Dover.
Read the full article:
Dover On The Defensive
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