Monday, April 30, 2018

Lincoln Electric Doing Its Part, But The End-Market Outlooks Are Getting Murky

Welding market leader Lincoln Electric (LECO) has gone nowhere fast over the past year, as the market seems to be uncertain about the prospects for ongoing recoveries in the industrial markets that the company serves. Lincoln Electric is also dealing with input cost inflation while working to integrate its Air Liquide acquisition and continuing to build out its automation offerings.

Although metalworking demand still seems to be relatively healthy, I can understand investor caution regarding heavy industry and general fabrication markets, as this recovery cycle has been going on for a little while. Lincoln Electric is a very well-run company, typically producing mid-to-high teens ROICs, but it remains cyclical, and investors seem to be more and more cautious toward cyclical industrial stocks right now.

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Lincoln Electric Doing Its Part, But The End-Market Outlooks Are Getting Murky

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