nVent Seems To Be Underperforming Its Markets, And It's Not Clear Why

Given the valuation, end-market exposures, and performance relative to its end-markets, I wasn't too keen on nVent (NYSE:NVT) back in May of this year. Between weakening industrial end-markets (which I expected), further relative underperformance (which I feared), and the surprising departure of the CFO, as well as management reiterated that it doesn't plan on a large-scale change in its R&D process, the shares are down about 10% from the time of that last article and were down closer to 30% before a decent third quarter and an overall industrial rally lifted the stock.

Relative to industrials broadly, and other electrical-exposed peers like ABB (ABB), Eaton (ETN), Emerson (EMR), Hubbell (HUBB), Legrand (OTCPK:LGRDY), and Schneider (OTCPK:SBGSY), nVent's share price performance has been pretty poor. On a positive note, the company's margins still remain quite healthy, and I expect many short-cycle industrial markets to start showing demand recoveries around the middle of next year. I don't really consider the valuation a "can't miss" now, though I would note that once May 2020 rolls around, nVent could be more in play as an acquisition target.

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nVent Seems To Be Underperforming Its Markets, And It's Not Clear Why