Monday, June 25, 2018

IDEX's Differentiated Model Supporting Above-Average Growth

IDEX’s (IEX) focus on differentiated, mission-critical products for comparatively niche applications continues to serve it well in what has been a sometimes shaky market for industrials this year. With the shares up about 5% this year and closer to 25% over the past 12 months, IDEX has been one of the better-performing industrials, which fits with the company’s better-than average revenue and order growth and margin leverage.

Valuation remains my primary issue with the company. I have no problem modeling above-average long-term growth for IDEX, and I believe companies with strong margins and ROICs deserve a premium, but it’s tough to make the numbers work today. Should the company stumble around a quarterly earnings report and/or should the sector see a contraction in multiples, this is definitely a name I’d revisit.

Read the full article here:
IDEX's Differentiated Model Supporting Above-Average Growth

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