Well off the beaten path and certainly not a strong performer over the past year, Lydall (LDL)
is an interesting name to look it for what the company could be worth
if management can improve their internal execution and drive some
long-promised margin improvements. Lydall has a good track record with
M&A, including the recent acquisition of Interface Performance, but
between the challenges of the auto industry, material cost inflation,
and execution issues, the company has not been performing up to its
capabilities.
Betting on a company to get itself
together and improve its operating performance always involves risk, and
it is entirely fair for readers to question why they should bother
unless and until the segment-level margin performance at least stops
getting worse. That said, the valuation would seem to offer some upside
based upon what I consider to be fairly conservative assumptions that
leave room for upside if and when management delivers better results.
Read more here:
Lydall Needs To Complement Good M&A With Better Internal Execution
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