It’s hard to find much to pick at with Roper (ROP). Sure, the ROIC/CROCI could be a little higher, but this tech and software-driven multi-industrial has “out-Danaher’ed” Danaher (DHR)
over the past 15 years with a 20% annualized return driven by well
above-average revenue growth, operating margins, FCF growth, and FCF
margins. What’s more, the company’s transition toward niche-based,
asset-light, SaaS-driven recurring revenue puts the company in a sweet
spot with respect to many of its more cyclical peers.
Roper
investors got a negative surprise on Friday, though, as the company
announced that Neil Hunn would be assuming the CEO position effective on
September 1, with Brian Jellison stepping down. While this transition
is coming about three years sooner than expected, Hunn has been groomed
for this position for some time. Rising valuations and ample capital
left to deploy will test Hunn early in his tenure, but my basic
viewpoint today is that Jellison established a model that can continue
to generate strong results without him.
Read more here:
An Unexpected Leadership Transition Likely Won't Faze Roper
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