The market definitely didn’t like Alfa Laval’s (OTCPK:ALFVY)
fourth quarter earnings, and particularly the parts of the call where
management said things like first quarter demand being “somewhat higher”
than the fourth quarter and that demand was “nearing the peak” for the
cycle. Although Alfa shares are up slightly from my last update
on the company, the shares lost about 10% of their value in the
immediate aftermath of the fourth quarter report and have since
recovered about half of that.
Operationally, I like
Alfa Laval. I think this is a well-run company with good exposure to
late-cycle end-markets, but I also know that orders are likely to slow
dramatically in 2019, with revenue and earnings following in 2020 and
2021. These shares do look undervalued now, and I think the market may
be overlooking opportunities in HVAC, power gen, life sciences, and
ballast water treatment, but the reality is that fighting the tape is
tough and investors are going to need to have some patience with this
one.
Continue here:
A Tug Of War With Alfa Laval Between Weak Sentiment And Post-Peak Growth
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