This may be obvious to many readers and investors, but timing is an invaluable part of the investment process. A couple of months ago, Columbus McKinnon (NASDAQ:CMCO) would have looked like a significantly undervalued and overlooked play on a general industrial recovery, not so much an underappreciated leader in the material handling market with a catalyst from increasing automation.
Fiscal second quarter earnings were quite encouraging regarding that recovery, though, and the recent Presidential election only strengthened investor conviction, taking these shares up almost 60% since the day before second quarter earnings. I do believe that recovery will come, though, and the recently-announced deal for Konecranes' (OTCPK:KNCRY) STAHL business should benefit revenue, margins, and cash flow in the years to come.
With an underlying expectation of mid single-digit revenue growth and high single-digit cash flow growth supporting a fair value of about $28, Columbus McKinnon still has some appeal, but it would definitely be a name to watch for a pullback if this rally hits the rocks.
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Columbus McKinnon Poised For An Industrial Recovery, But So Is The Street