One of the topics I’ve mentioned relatively frequently in talking about Parker-Hannifin Corp. (NYSE:PH) is the growing dichotomy between the market’s ongoing perception of this company as a classic short-cycle industrial and the reality of the company’s transformation toward an a-cyclical (or at least less cyclical) compounder that creates value across cycle. Management went to some lengths to reiterate that case at its recent Investor Day, and it’s an argument I think is worth listening to.
I was very tempted to buy into Parker Hannifin shares last August, and while I have missed the recent rebound from the low $270’s, I think there’s still credible long-term value here. I’m not completely with the bulls who think this is a brand new Parker Hannifin, and I think the company still lacks “flashy” exposure to attractive secular growth markets, but I think there is a lot more to this story than just short-cycle industrial exposure.
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