While short-cycle industrials have recovered in recent months, Fortive (FTV)
is still on track for a rare year of underperformance relative to the
“average” industrial stock. This comes despite the announced decision to
break the company in two and reposition RemainCo to focus more on
software, connected devices, healthcare, and workflow management, partly
due to the company’s exposure to this short-cycle slowdown. Although I
find a lot of things to like about Fortive, I just can’t get that
excited about the shares now. While I don’t disagree with the
direction/focus of Fortive’s (RemainCo) M&A efforts, some of the
specific deals have been questionable in terms of valuation and growth
potential. What’s more, while I do expect 2020 to be meaningfully better
for important segments like test & measurement, the valuation seems
to already reflect that.
Read more here:
Fortive Getting Plenty Of Love For Its Transformative Potential
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