Parker Hannifin A Curious Mix Of Value And Cycle Risk

By and large, investors seemed to come out of the second quarter earnings cycle feeling better about industrial stocks and the amount of room left for the cycle to run, although that seems to be wavering a bit lately on worries that Turkey’s troubles could weaken already unimpressive demand in Europe. In the case of Parker-Hannifin (PH), though, the shares have continued to lag the industrial sector as a whole by a pretty noticeable amount year to date, as investors seem worried about the risk of “general industrial” and mobile equipment demand rolling over relatively quickly.

I’ll admit to being a little flummoxed by this stock right now. I thought there was some risk of underperformance (due mostly to perception/sentiment) when I last wrote about the stock, and the shares have underperformed the sector by about 5% since then. It is getting late in the game for a short-cycle name like Parker-Hannifin, but then, underlying trends in most of the company’s markets are pretty positive, and the valuation looks pretty undemanding even if there’s a noticeable slowdown in the reasonably near future.

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Parker Hannifin A Curious Mix Of Value And Cycle Risk