Efficiency Initiatives, M&A, And Cycle Have Boosted Columbus McKinnon

Columbus McKinnon (CMCO) is off the beaten path, and at around $1.3 billion in enterprise value it is certainly a smaller industrial, but this company is a leading player in material handling products like hoists, industrial cranes, controls, and actuators. Not only has the company gotten a noticeable boost in recent years from acquisitions and cyclical recoveries across a range of industrial end-markets, but the company has also done an excellent job of executing on the (relatively) new CEO’s vision for a leaner, more dynamic Columbus McKinnon.

Although the shares have outperformed the industrial sector this year (and significantly outperformed over the past two years!), this may not be the end of the opportunity. I’m a little nervous about projecting high single-digit to low double-digit FCF margins for a business like this, but it’s hard to argue with the margin improvements that the company has already made, as well as the opportunities in product simplification and R&D re-investment.

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Efficiency Initiatives, M&A, And Cycle Have Boosted Columbus McKinnon