Wednesday, September 14, 2016

Roper Technologies Looking A Little Wobbly Of Late

I don't write on Roper Technologies (NYSE:ROP) as often as I probably should; mostly because its collection of niche businesses makes it something of a P.I.T.A. to conduct the in-depth due diligence that I like to do. That said, you can look at Roper as either one of the most complicated simple businesses or one of the most simple complicated businesses out there in industrial conglomerate land - there are a lot of moving parts, but they're unified by an overall commitment to defensible niches, good margins, and keen attention to the generation of re-investable cash flows.

In some respects, Roper today reminds me a little too much of Dover (NYSE:DOV) for comfort - a conglomerate being hit hard by energy, but with other worrying patches of weakness appearing. That said, the shares have beat the S&P over the past year and they don't really screen as "cheap." I'd need to bump my long-term revenue growth estimate by about 0.5% to get the DCF to today's price, but Roper does seem priced to generate high single-digit annual total returns from here and that's not exactly "bad" either.

Read more here:
Roper Technologies Looking A Little Wobbly Of Late

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