I thought Parker Hannifin (PH) was priced for near-perfection
before the Covid-19 crisis hit, and in a decidedly not-perfect new
operating environment, Parker Hannifin shares have been hit a little
harder than the average of its peer group. While some of the company’s
end-markets will likely need more time to get back to 2019 levels, I
think Parker Hannifin’s short-cycle exposure will be a very positive
differentiator as the recovery begins later in 2020, and I’m also
impressed with the company’s short-term margin performance.
I
can’t really fault Parker management for their recent strategic
decisions; the timing on their move toward a bigger presence in
aerospace turned out to be unfortunate, but who had “global pandemic
that crushes air travel” on their 2020 prediction list? Parker will
probably always be a cyclical short-cycle industrial, but the quality of
the business has improved meaningfully, and I think the shares still
look pretty attractive here.
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Parker Hannifin Poised For Better Performance On The Other Side Of COVID-19
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