With process industries, aerospace, and retail/leisure activity picking up, it shouldn’t be altogether surprising that Crane (NYSE:CR) shares are doing better, particularly when management execution seems to be improving as well. Relative to my last update on the shares, Crane is up about 8%, beating the S&P 500 as well as the broader industrial sector (by close to 10%).
I don’t think Crane’s run is over yet. Process industries are just starting to recover, and even if the market is anticipating that, there are opportunities to grow the business and boost margins. Aerospace is just starting on what should be a nearly decade-long growth cycle, and recovering retail activity and acute labor pressures should drive more growth in the Payment & Merchandising Technologies (or PMT) business. On top of that, there’s margin leverage and capital redeployment potential here, and I can see a path to double-digit annualized returns from here.
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