Free To Set Its Own Course, ESAB Is Running Into Some Cyclical Worries

Writing about the Enovis (ENOV) / ESAB (NYSE:ESAB) split back in April, I said that I was more interested in ESAB, as I thought this welding company had often gone underappreciated and under-supported within the dubious conglomerate operations of what used to be Colfax. The performance since then has done nothing to change my mind about that, as ESAB has done reasonably well for itself as an independent company, though it still carries some of the burdens of past issues created by Colfax.

ESAB shares have lost about 10% of their value over that time, trailing Lincoln Electric (LECO) and the broader industrial space, but outperforming many other short-cycle industrials like Kennametal (KMT) and Sandvik (OTCPK:SDVKY) as investors grow increasingly nervous about a short-cycle rollover in 2023. I don’t think this is the best set-up for ESAB, as short-cycle industrial and construction markets could weaken in 2023, but I do think there is underappreciated value and potential in this business.

 

The full article is available at Seeking Alpha: 

Free To Set Its Own Course, ESAB Is Running Into Some Cyclical Worries