Sunday, February 7, 2016

Seeking Alpha: Dover Probably Undervalued, But Where's The Spark?

There's a pretty broad universe now of beaten-down industrial conglomerates that would seem to offer attractive upside for patient investors. Dover (NYSE:DOV) would seem to be among them, as the sharp decline in the energy business has mauled the company's financial results but not so much that the company couldn't still generate double-digit FCF margin in 2015.

Dover has never been the most exciting of the conglomerates, but I don't think mid-single digit long-term growth in free cash flow should be out of reach, and that still supports a fair value in the high $60's. The problem is that it's hard to see what gets investors interested in owning the shares in the next few quarters. Dover doesn't have meaningful exposure to popular end markets like aerospace, construction, healthcare, or passenger vehicle production, so unless energy starts recovering sooner than most expect, this stock will probably require some patience.

Read the full article here:
Dover Probably Undervalued, But Where's The Spark?

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