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.
Read the full article here:
Columbus McKinnon Poised For An Industrial Recovery, But So Is The Street
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