It's been much, much too long since I've written on Nordson (NDSN), but how many different ways can you say "this is a great company and I love the growth opportunities, but I don't really want to buy in at this price?" To that extent, this company is quite similar to names like Graco (GGG) in that it consistently does a good job, though with some cyclicality and not that much fanfare on the Street.
Since I wrote on the company back in 2017 (when I thought it was great but expensive), the stock has generated a total annualized return of 12.6% (including reinvested dividends) - just slightly below the 12.9% return of the S&P 500. This is my issue with overpaying - sometimes, with some companies, it works out, but often there's a price to be paid sooner or later.
This is a great company, and I still like the growth opportunities - particularly in areas like advanced semiconductor fabrication and packaging. I also like how management has expanded the medical business and adjusted the business model (NBS Next) to drive better growth over the next cycle. What I don't like, of course, is the valuation and this is a watchlist name for me for the next market freakout.
Read more here:
Nordson: A Quality Industrial Growth Name, And Priced Accordingly
No comments:
Post a Comment