Columbus McKinnon Under Pressure Now, But The Longer-Term Opportunity Is Intriguing

In an already-tough market for capex-oriented industrials, Columbus McKinnon (NASDAQ:CMCO) hasn’t done itself any favors with an outlook that led sell-side analysts to lower their short-term expectations for both revenue and margins. With that, the shares have lost about a third of their value since my last update on the company, underperforming not only the industrial sector, but other plays on industrial motion/automation as well.

I don’t believe the long-term story at Columbus has changed as dramatically as the valuation, but it’s clear that the market isn’t interested in capex plays at a time when industrial orders are contracting, margins are still under pressure, and demand is likely to cool off noticeably in the second half. While margin worries are going to understandably weigh on sentiment for a while longer, I do think this is a beaten-down name worth another look.

 

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Columbus McKinnon Under Pressure Now, But The Longer-Term Opportunity Is Intriguing