Seeking Alpha: Actuant Could Use A Boost To Growth

As conglomerates go, Actuant (ATU) is more diverse than most and while it is often one of the largest/leading companies in the sectors in which it competes, it can be challenging to corroborate the company's performance with its peer group. Be that as it may, performance has been a little iffy lately relative to sell-side expectations and the stock has been stuck in a relatively narrow band for the past year.

Actuant isn't lacking in ambition, as management intends to use organic/internal development and M&A to push toward a doubling of the business in five years. That may well be attainable, but the company's poor history of ROIC generation lends itself to questions like "growth at what cost?" I do believe that Actuant is undervalued today, and I like its hydraulic tools and bolt tightening businesses, but I'd want to see a better path for margins and returns on capital before thinking of it as a potential core holding.

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Actuant Could Use A Boost To Growth

Seeking Alpha: A More Focused Sulzer Should Be A Better Sulzer

Leading pump manufacturer Sulzer (SULZF.PK) (SUN.VX) hasn't been on the best run of late. Relative to fellow pump players Flowserve (FLS) and Weir Group (WEIGY.PK), Sulzer's performance over the past year (up about 4%) has been pretty poor, due in very large part to a huge miss with second quarter earnings and a three-day fall of nearly 20%.

Admittedly, the company's guidance for fiscal 2013 isn't exciting - sales and order growth in the low single digits - and Sulzer's margins and returns on invested capital have been stepping lower since 2008. That said, this company has 20% to 50% share in its core pump markets and a decision to refocus around its pump and fluid control businesses in markets like oil/gas, power, and water should lead to improved results down the line. Buying Sulzer today is a contrarian move, and a bet on improved operating performance, but one that I don't think is unreasonable given the company's past performance and future potential.

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A More Focused Sulzer Should Be A Better Sulzer

Investopedia: Absent A Quick Turnaround In Power, GE Has Gone Far Enough For Now

General Electric (NYSE:GE) has been one of my go-to industrial stocks since around mid-2009, and the stock hasn't disappointed in that time – rising more than 140% and besting the return of the S&P 500 by about 30% or so. Companies and stock picks are always fluid, though, and the recent developments in GE's industrial margins and free cash flow (FCF) generation haven't been all that positive (particularly in power). While some of this is cyclicality and some is likely growing pains, a somewhat longer ramp back to strong operating performance leads me to think that GE is close to fair value absent a big turnaround in industrial demand and/or margins at GE.

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http://www.investopedia.com/stock-analysis/061313/absent-quick-turnaround-power-ge-has-gone-far-enough-now-ge-si-nov-spw.aspx

Seeking Alpha: Global Power Equipment Is Either A Big Value Or A Trap

By and large, investors do well for themselves if they assume that something that looks too cheap to be believed shouldn't be believed. Of course, carry that philosophy too far and you miss most of the really impressive turnarounds and long-term growth stories.

That brings me to Global Power Equipment (GLPW). This company has been suffering lately from lower service demand and delayed orders, but nevertheless offers an intriguing mix of sustainable recurring revenue and leverage to natural gas-fired electricity generation expansion. A discounted cash flow suggests significant potential undervaluation, but investors would do well to remember that many power/utility-focused companies have ultimately disappointed relative to their long-range forecasts.

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Global Power Equipment Is Either A Big Value Or A Trap

Investopedia: Confidence And Relief Will Take General Electric Only So Far

Industrial and financial conglomerate General Electric (NYSE:GE) did a little better than expected with fourth quarter results, but overall revenue and order trends suggest that the company really hasn't separated itself from the industrial pack. It's relatively easy to argue that the company's fourth quarter performance takes some risk out of the guidance for 2013. But will there be enough momentum in business like aviation, health care and oil/gas to carry the shares to another market-beating performance in 2013?

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http://www.investopedia.com/stock-analysis/2013/Confidence-And-Relief-Will-Take-General-Electric-Only-So-Far-GE-UTX-SPW-HON0124.aspx

Investopedia: Is A Deal For Gardner Denver What SPX Really Needs?

Rumors have been swirling for a while about whether industrial compressor, blower and pumpmaker Gardner Denver (NYSE:GDI) would, in fact, reach a deal to sell itself and whether SPX (NYSE:SPW) would make an aggressive play for this company. With rumors now heating up that the two companies are in exclusive talks, it's very much worth asking whether this is really a good deal for SPX or Gardner Denver shareholders.

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http://www.investopedia.com/stock-analysis/2012/Is-A-Deal-For-Gardner-Denver-What-SPX-Really-Needs-SPX-GDI-IR-ATLKY1213.aspx

Seeking Alpha: SPX - A Complicated Power Play

It has been an interesting decade for SPX (SPW), as the company has gone through spasms of acquisition and divestiture but really hasn't set the world on fire with its margins, returns on capital, or free cash flow generation. With most of the business shuffling complete, and broadly improving utility demand, can SPX show that it deserves a spot on a list of quality industrial conglomerates?

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SPX: A Complicated Power Play

Investopedia: Flowserve Looking To Bookings And Margins

It was just the other day that Reuters ran an article highlighting the risk that a building boom in domestic pipelines could be significantly slowed by a shortage of the enormous heavy-duty valves and pumps that such projects require. That sounds like a pretty healthy backdrop for Flowserve (NYSE:FLS) - a veritable pure-play on fluid handling equipment like pumps and valves. The question for Flowserve investors, though, is how much the company can improve its full-cycle margins and how much is already built into the price.

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http://stocks.investopedia.com/stock-analysis/2012/Flowserve-Looking-To-Bookings-And-Margins-FLS-SPW-TYC-GE0803.aspx

Investopedia: GE Still On A Road To Recovery

For a company as large as General Electric (NYSE:GE), it's basically a given that every quarter will have both good and bad news. Although GE's margins are a cause for concern, and perhaps part of a broader worry about whether corporate America has seen the best of this metric, the order rate is still solid and the company has gone a long way towards fixing the mess left from the credit crunch. (For more, read Earnings Power Drives Stocks.)

Mixed Results for the Third Quarter 

GE's reported consolidated revenue fell just slightly, with reported revenue from GE's non-finance operations down about 2%. On an organic basis, though, GE's industrial revenue rose about 8%. Growth was quite strong in the energy, oil/gas and transportation segments, while the home and business segment,which includes appliances, was fairly weak.

Profitability was not as impressive, though. Reported operating income was up about 15%, but that included a fairly sizable contribution from the improvement at GE Capital. The industrial business, though, saw profits drop about 1%. On the other hand, adjusted operating earnings from continuing ops were up about 11%. All in all, GE continues to make progress, but shareholders cannot rest too easily with those margins.

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http://stocks.investopedia.com/stock-analysis/2011/GE-Still-On-A-Road-To-Recovery-GE-BRK-A-SI-EMR-DHR-DOV-HON-SPW-PHG1026.aspx

Investopedia: Illinois Tool Works Spooks The Street

Whether it's the wrangling over the debt limit in Washington, the ongoing problems in Europe, or the shaky economic data coming out in recent months, institutional investors are playing defense these days. So while it looks like the biggest problem Illinois Tool Works (NYSE:ITW) has is that its early-cycle businesses are slowing and the company is transitioning through the cycle, investors seem to be pretty nervous about the stock, the company, and the broader industrial sector. 

Iffy Second Quarter Results  
To be sure, there were some spots on the second quarter for Illinois Tool Works. Reported revenue rose more than 17%, but organic growth was more on the order of 6%. That is really not so bad relative to other large industrial conglomerates like United Technologies (NYSE:UTX), General Electric (NYSE:GE) or Danaher (NYSE:DHR), but it does represent a significant deceleration from the first quarter, and it was not great relative to expectations. 


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http://stocks.investopedia.com/stock-analysis/2011/Illinois-Tool-Works-Spooks-The-Street-ITW-UTX-GE-DHR-LECO-ETN-EMR0802.aspx

Investopedia: General Electric Cleaned Up And Reloaded

Fans and sports reporters talk about how perennially competitive teams "don't rebuild, they reload" and the same could be said for General Electric (NYSE:GE). Though far too much has been made of Six Sigma (which was actually created at Motorola), the managerial abilities of its CEOs, and the "inevitability" of GE's diversification bringing solid results, the fact remains that GE is a very competitive player in numerous key growth markets. With the company having repaired a fair bit of the damage done in the credit crunch, this industrial conglomerate looks poised again for some growth. 

Q2 Results - Always Complicated, But Showing Improvement  
To its credit, GE gives investors a large amount of data to chew on every quarter. While GE reported that reported revenue (including GE Capital) fell 4% and industrial revenue fell 6%, organic industrial revenue looked to be positive to the tune of about 5%. Segment operating profit margin compressed about two points (due to weakness in energy, particularly wind power), but reported operating earnings from continuing operations rose 18%. 


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General Electric: Cleaned Up And Reloaded (GE, SPW, NOV, UTX, BA, HOLX, HAL)