Quite likely one of the best-run companies I follow, Sika (OTCPK:SXYAY) (SIKA.SW) shares have “only” kept pace with the broader industrial sector since my last update on the company, as well as keeping pace with BASF (OTCQX:BASFY), while Saint-Gobain (OTCPK:CODYY) has done a fair bit better and RPM (RPM) a fair bit worse. Keep in mind, too, that “only” keeping pace still means that the shares are about 30% higher than they were at that last article.
Sika is already seeing a strong post-pandemic recovery, with particular strength in Asia (NASDAQ:CHINA) offsetting a more sluggish recovery in the U.S.. As the year rolls on, I expect good underlying demand improvement, and I love Sika’s long-term exposure to greener building trends in non-residential and infrastructure, leaving the company well-placed to take advantage of government programs aimed at promoting a greening of those end-markets.
Price/value remains a problematic issue if you’re a more value-oriented investor. I believe Sika could generate organic revenue growth double that of global GDP, with M&A adding in more on top of that, and I likewise see room for more operating leverage. Even with those assumptions in place, though, the valuation is very much in growth stock territory.
Click here to continue:
No comments:
Post a Comment