Ingersoll-Rand Makes A Big Move, And The Street Very Much Approves

I’ve liked Ingersoll-Rand (IR) for a little while and thought it was still one of the better ideas in the multi-industrial space back in late January, but I wasn’t expect quite this level of performance, as Ingersoll-Rand has outdone even Honeywell (HON), though still lagging Atlas Copco (OTCPK:ATLKY). Of course, much of that outperformance was driven by the announcement that Ingersoll-Rand would be merging its Industrial business with Gardner Denver (GDI) in a Reverse Morris Trust; although I thought something in the direction of a break-up was possible, it wasn’t my base-case assumption.

The Street by and large wanted a Climate-only Ingersoll-Rand and that’s what they’re getting, with the added benefit of a healthier valuation now assigned to the compressor-driven Industrial business. Although I like the prospects for both Climate-only IR and the soon-to-be new Gardner Denver, I can’t say that there’s anything like the same unappreciated potential in the shares now as a few months ago.

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Ingersoll-Rand Makes A Big Move, And The Street Very Much Approves