Wednesday, April 24, 2019

Dover Starts 2019 Right, But Can It Follow Through?

Dover (DOV) has been on a good run so far this year, up about 36% since the start of the year on a wider rally in industrials, but the performance gap has narrowed a bit over the three months. Still, Dover got off to a strong start in the first quarter, but margin leverage and order growth weren’t all that bulls might hope for, and it remains to be seen whether the general industrial/discrete manufacturing sectors that account for a lot of Dover’s revenue base will hold up as 2019 rolls on.

There aren’t so many bargains left in the multi-industrials now, and I include Dover in that group. I’ve liked the shares in recent months/quarters, but the strong move has soaked up the undervaluation that I saw and I’m still concerned about the level of expectations for the economy and corporate earnings going into the second half. I like the healthy results in fluids, product ID, and industrial businesses, not to mention the longer-term potential from restructuring, but I think the shares factor that all in now.

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Dover Starts 2019 Right, But Can It Follow Through?

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