Milacron Delivering, But The Road Is Getting A Little Rockier

There's no question that companies opened their wallets over the last 12 months to buy capital equipment, whether to expand production capacity, replace aging machinery, or take advantage of greater efficiency with more modern equipment (or some combination), and that has benefited Milacron (MCRN), as the company has seen better demand for plastic molding equipment and an ongoing conversion toward hot runners.

With better results and higher multiples across the machinery space, Milacron's shares have done okay since my last update in May of 2016. Though the shares have sold off about 10% recently, they've still generated a double-digit return over the past year despite rising input costs offsetting a lot of the progress the company has made with operating expenses. Although I think Milacron's multiple should have room to improve from here, I'm a little more cautious on the near-term outlook for machinery investment, particularly with trade protectionism bubbling up.

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Milacron Delivering, But The Road Is Getting A Little Rockier