Writing about Parker-Hannifin (NYSE:PH) in August I highlighted the efforts that management has been making to transform a business historically driven by short-cycle industrial markets into a more diversified, higher-margin, better overall industrial company. Since then, the shares have added another 40%, more than doubling the return of the broader industrial sector.
“It’s different this time” are words that should always worry investors, and I do have concerns about valuations across the broad industrial group. That said, I do believe that Parker-Hannifin is a different company today than five, 10, or 20 years ago, and I’m not going to just assume that the shares are doomed the underperform now that the PMI is closing in on 60. I am not all that excited about the prospective returns I see here today, but I would still very much agree with a “best among its peers” argument in favor of choosing Parker-Hannifin if you had to buy an industrial.
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Parker-Hannifin Offering Short-Cycle Leverage, But A Whole Lot More Too
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