Will the real industrial market please stand up? Looking over the
various and sundry industrial company reports I've written in recent
months, it's very clear that the U.S. manufacturing sector is going
through a rough patch, due in large part to very weak demand stemming
from the energy sector, as well as weakness in off-highway equipment and
growing weakness in commercial trucks. And yet, the market's reaction
seems to be "don't worry… it'll bottom soon and then get better", helped
I'm sure by at least a few companies that have said exactly that.
As it pertains to Hurco (NASDAQ:HURC),
a tiny manufacturer of machine tools, it's a tough environment to
model, but I think the company is handling itself quite well. Machine
tools will always be volatile and there are no assurances that the
company's strategy of expanding into more production-oriented tools will
really grow the business. Still, I believe the shares are undervalued
if my predictions of mid single-digit FCF growth and 8.5% to 10.5%
returns on equity prove reasonable.
Read the full article here:
Hurco Holding Strong In A Tough, Uncertain Market
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