Although Smiths Group (OTCPK:SMGZY)
(SMIN.L) enjoyed a good spring/early summer, the shares have given up a
lot of those gains as concerns continue to swirl around the Medical
business, particularly now that the negotiations with ICU Medical (ICUI)
have fallen apart. Not helping matters are concerns as to whether the
John Crane business can continue to do all of the heavy lifting for the
business and whether management is truly serious about generating value
through active portfolio management.
The inability
to sell Medical is a disappointment, and there’s really no denying that
unwinding conglomerates is now in vogue. With Smiths inability to
generate meaningful organic growth in many years, investors want more
action even though the company has generated more respectable returns on
capital. Given these pressures, Smiths upcoming earnings are going to
be an important event for investors – moreso in terms of what management
has to say about its vision for portfolio transformation over the next
year or two.
Read more:
Smiths Group Back To The Drawing Board With Value-Creation
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