On a basic level, I think Flowserve (NYSE:FLS)
operates an attractive business. The global addressable market for
pumps, valves, and seals is around $120 billion to $130 billion and
although Flowserve is one of the largest players (and the only one to
offer all three major components), it still only has around 3.5% share
of the market. As automation continues to move forward, I expect the
demand for pumps and valves to increase, and I also believe Flowserve
has the opportunity to build or buy its way into end-markets where it
has lower-than-average weighting.
In the meantime,
though, this is still a very challenging market for Flowserve. The oil
and gas markets may be stabilizing, but that's not synonymous with
growing and other markets like chemicals, power, and general industrial
are still looking for stability. These shares have been lifted along
with so many others in the post-election rally, but I would also note
that this is a stock that historically has been valued more richly than
might otherwise seem fair.
Continue here to read more:
Flowserve Dog-Paddling While Waiting For Orders To Recover
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