Fortive Ready For The Turn

Fortive (NYSE:FTV) has done pretty well since my last update on this (relatively) new industrial conglomerate, as the shares' 13% rise more or less matches that of 3M (NYSE:MMM) and stacks up better against the likes of Dover (NYSE:DOV), Keysight (NYSE:KEYS), and Illinois Tool Works (NYSE:ITW). While some of this performance is likely a byproduct of positive coverage initiations, Fortive has managed to continue generating positive core growth and looks well placed to leverage the nascent U.S. industrial recovery.

The fundamental story at Fortive hasn't changed all that much. This is a diversified industrial conglomerate that is run along the same principles as Danaher (NYSE:DHR); principles that include continuous process improvement and responsiveness to customer needs, as well as opportunistic M&A. I believe that Fortive can generate healthy mid-single-digit revenue growth with the businesses it has, particularly given efforts to improve and grow businesses like Tektronix and Kollmorgen, and acquire at least a few percentage points more from M&A. While the shares do not look undervalued, the implied high single-digit total return isn't so bad on a relative basis and Fortive looks like one of the better names to consider in an industrial sector that offers few obvious bargains.

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Fortive Ready For The Turn