Quality deserves a premium, but the market seems to be going overboard with Kone (OTCPK:KNYJY)
(KNEBV.HE) (also spelled “KONE”), as this Finnish elevator and
escalator company is indeed a high-quality company, but one that seems
unlikely to grow enough to justify the valuation. Future service growth
in China is a valid driver, as is equipment growth in India and other
markets, and I don’t dismiss the possibility of a value-building
mega-merger, but the share price already seems to contemplate nearly
double-digit free cash flow growth from a company serving a market
likely to grow in the low-to-mid single digits.
Read more here:
Kone Already Getting Ample Reward For Its Quality
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