I've been bullish on Parker-Hannifin (NYSE:PH) for a while, but the company and the stock have managed to exceed my expectations along the way. With the shares up close to 30% since my last piece, handily beating the likes of Eaton (NYSE:ETN), Dover (NYSE:DOV), and Illinois Tool Works (NYSE:ITW), the shares continue to reflect a strong recovery scenario - a scenario that admittedly seems a little more realistic now given the generally healthy calendar first quarter results in the sector and Parker-Hannifin's own 8% reported order growth.
Parker-Hannifin's performance has been solid even without Clarcor, a deal that although expensive is likely to prove worthwhile over time, and underlying conditions are getting better as Parker-Hannifin management sees improvement in a wide range of end-markets. Although these shares are (finally) above my fair value and the reaction to first quarter earnings suggests high expectations, the valuation is not so unreasonable on a relative basis and these shares could still have some appeal for investors who want to continue playing the industrial recovery theme.
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Parker-Hannifin Pumped Up On Recovery In Industrial Markets