One of our special focuses this week is on Industrial Manufacturing and Machinery. The news is this space, according to many analysts is a mixed bag of good and bad news. Analyst James Lucas talked us about one company that’s representative of this, IDEX (IEX).
IDEX is a company that is a “mid-cap, mutli-industry company that is in a number of markets”. While two-thirds of its business are in life-sciences, the other third is “everything from paint dispensers that you find in Home to Depot or Shwerin-Williams to the Jaws of Life that are on fire trucks. Here’s what James had to say about this company:
“This is a company where 80% of the portfolio is doing well, and 20% has been facing headwinds lately, whether it’s OEM fire truck builds to a couple of OEM contracts in their life science business that they are winding down because of not being at the profitability levels that they liked. While Home Depot and Sherwin-Williams are growing their paint departments, some of the more traditional hardware stores, the small mom ‘n’ pop hardware retailers, aren’t necessarily investing in new paint dispensing machines. But if you look at the 80% that is doing well, which could be anything from chemical processing to oil to water and wastewater, you see that IDEX is in a number of end markets that are doing very nicely, and this is a company that has a very strong track record on the cash flow front.”
For the full interview with Mr. Lucas, including a complete overview of this space, what’s to come, and more stock picks, click here.
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