GEA Group's Struggles Look Like A Potential Window Of Opportunity

GEA Group (OTCPK:GEAGY) underscores one of the challenges in the market today – if you want to pick up shares of an industrial company at a decent (or maybe even “cheap”) valuation, you’re going to pay for it in others ways. In the case of GEA Group, that’s consistency and quality, as the company announced another miss for the fourth quarter and gave disappointing guidance for 2018.

The good news/bad news at GEA Group is that this is a generally good collection of assets that aren’t being run particularly well. With activist investors now involved, I believe there will be more pressure on management to start hitting their efficiency targets and I think the Street would generally welcome a change in management if it comes to that. Priced to generate a high single-digit return from here, I think GEA Group has some appeal, but this stock will require patience and an above-average ability to stomach some near-term volatility and disappointment.

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GEA Group's Struggles Look Like A Potential Window Of Opportunity