The Lack Of Reaction To Strong Earnings From Komatsu Is Getting Interesting

 

I was pretty negative on Komatsu (OTCPK:KMTUY) when I last wrote about the stock in mid-2021, mostly due to my concerns about the long-term ramifications of what I believe were bad strategic decisions in the past. At the same time though, I did expect to see improving results in the reported financials as global construction markets recover and miners refresh and expand their aging fleets. The shares have basically done nothing since then, outperforming mining-focused Weir (OTCPK:WEGRY) and more or less keeping pace with other comps like Caterpillar (CAT) and Epiroc (OTCPK:EPOKY).

I still have concerns about the long-term strategic positioning of Komatsu, but I'm finding the lack of response to better-than-expected earnings over the last several quarters to be curious. All told, I'm more bullish now on mining and construction equipment than before, and I do think there are signs that Komatsu is moving to correct past strategic blunders. I'd never want to own Komatsu as a long-term holding, but I'm increasingly interested in the shorter-term opportunity here.

 

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The Lack Of Reaction To Strong Earnings From Komatsu Is Getting Interesting