Sunday, December 9, 2018

Market Worries Overshadowing Ongoing Strength At Alfa-Laval

Alfa-Laval's (OTCPK:ALFVY) shares have corrected sharply since my last update on the company, with the shares down more than 20% on what has been a pretty broad-based downturn for European industrials. Although there are some valid concerns about Alfa’s business mix in 2019 and the need for higher capex spending to support a surge of scrubber orders, there aren’t enough company-specific issues here to think this is more than a broad-based re-rating.

I thought Alfa-Laval wasn’t as appealing of an investment prospect back in July, but I didn’t exactly expect the sell-off we’ve seen in the market since then. While the valuation is definitely more interesting now, there are a lot of other industrials getting cheaper now and I’d be careful about stepping in front of this current market downturn. Still, as one of the better late-cycle names I know, I think this is a name to look at going into 2019.

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Market Worries Overshadowing Ongoing Strength At Alfa-Laval

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