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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