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.
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Flowserve Dog-Paddling While Waiting For Orders To Recover