Worries About Oil And Marine Have Alfa Laval Trading Much More Reasonably

I wasn’t all that excited about Alfa Laval’s (OTCPK:ALFVY) share price back in December, but that was before Covid-19 scrambled the markets and threw the outlook for almost every industrial company out the window for at least the next two quarters, and possibly quite a bit longer. With the shares down about 25% since then, modestly underperforming its peer group, the valuation is now once again more reasonable for long-term investors.

“Long-term” really is the key here, as there are significant near-term concerns about the outlook for orders in the marine and oil/gas markets – two major end-markets that collectively account for over 40% of Alfa Laval’s business. Opportunities in HVAC, pharmaceuticals, food/beverage, and industrial end-markets offset this to some extent, but Alfa is likely looking at a more protracted recovery than its shorter-cycle peers, and could weigh on sentiment and share price performance even with a good valuation.

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Worries About Oil And Marine Have Alfa Laval Trading Much More Reasonably