The CEO of one of the med-tech companies I covered as an
analyst was fond of saying, “The bigger they are, the harder they hit,”
when explaining why he steered his company into defensible niches
largely ignored by large players, and that is largely the approach taken
by IDEX (IEX)
in its process technologies business. Despite competing in a wide range
of “typical” process industry end-markets, IDEX has focused on pumps,
meters, precision fluidics, dispensing equipment, and clamps that occupy
highly-defensible, mission-critical slots in segments that don’t
attract competitive attention from mega-cap rivals.
I
continue to love IDEX as a business, but the valuation is problematic
even if you believe that U.S. markets are going to return to growth in
2020. While I am very bullish on the long-term outlook for the company,
and acknowledge that I may be underestimating future contributions from
M&A, it’s tough to make the numbers work as they are, and so this
occupies a spot high on my watch list for now.
Click the link for more:
IDEX Corp: A Best-Of-Breed Process Tech Player
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