FLSmidth Should See A Sharper Recovery In 2018

Like its peers in the mining capex space, FLSmidth (OTCPK:FLIDY) (FLS.CO) has already seen a sizable recovery in its share price from the worst lows of the cycle, but there should be more in store as orders improve in 2018, and the company benefits from meaningful operating leverage. Although FLSmidth has exposure to a still-challenging cement market that other mining companies like Metso, Outotec, and Weir don't have to contend with, I think it is notable that FLSmidth has management to get this business close to breakeven even at historically weak levels of activity.

The cyclicality of FLSmidth is a major issue when it comes to considering these shares as a long-term holding, but that cyclicality can nevertheless benefit shareholders in the near term. If mining equipment orders and revenue continue to strengthen through 2018, I believe these shares can outperform with 10% or more upside from here in the short term.

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FLSmidth Should See A Sharper Recovery In 2018