Barclays on U.S. Multi-Industry: Industrial Stories Are Getting Stale
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Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
30 Buy, 10 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Barclays on U.S. Multi-Industry: Industrial Stories Are Getting Stale
Analyst, Scott R. Davis, said, "We are most of the way through the year-end investor day season and so far managements are giving investors few reasons to buy shares. Presentations have so far been stale with business models increasingly lacking material differentiation. Few new initiatives are being introduced, the rate of change of old initiatives is slowing. Little is being done to address slowing growth rates; companies seem to have given up on their ability to offset a weaker macro backdrop. The original purpose of the December sessions was to lay out a framework for forward guidance and most companies have used the opportunity to provide a deeper look inside their companies. A forward look at differentiated strategies and a playbook for shareholder value creation. There has been little in the way of a playbook this year replaced mainly by complaints over uncertain macro conditions and management discontent with share price levels."
"For us this increases our interest level in those companies whic h are more willing to control their own destiny or in stories with more tangible catalysts, like Danaher (NYSE: DHR), Roper (NYSE: ROP) as consolidators, WW Grainger (NYSE: GWW,) MSC Industrial (NYSE:MSM as share gainers, or electricals like CBE, TNB, Hubbell (NYSE: HUB-B) where we like both the end market exposures and potential M&A. Honeywell (NYSE: HON) remains interesting as a larger cap name where rate of change initiatives remain robust. But we think even these names need to step it up a notch and increase differentiation to get investors more excited. Management teams struggle with this notion but the reality is that investors buy two main things, differentiated stories and differentiated execution. Otherwise, portfolio managers have little incentive to increase tracking error and take liquidity risk."
Analyst, Scott R. Davis, said, "We are most of the way through the year-end investor day season and so far managements are giving investors few reasons to buy shares. Presentations have so far been stale with business models increasingly lacking material differentiation. Few new initiatives are being introduced, the rate of change of old initiatives is slowing. Little is being done to address slowing growth rates; companies seem to have given up on their ability to offset a weaker macro backdrop. The original purpose of the December sessions was to lay out a framework for forward guidance and most companies have used the opportunity to provide a deeper look inside their companies. A forward look at differentiated strategies and a playbook for shareholder value creation. There has been little in the way of a playbook this year replaced mainly by complaints over uncertain macro conditions and management discontent with share price levels."
"For us this increases our interest level in those companies whic h are more willing to control their own destiny or in stories with more tangible catalysts, like Danaher (NYSE: DHR), Roper (NYSE: ROP) as consolidators, WW Grainger (NYSE: GWW,) MSC Industrial (NYSE:MSM as share gainers, or electricals like CBE, TNB, Hubbell (NYSE: HUB-B) where we like both the end market exposures and potential M&A. Honeywell (NYSE: HON) remains interesting as a larger cap name where rate of change initiatives remain robust. But we think even these names need to step it up a notch and increase differentiation to get investors more excited. Management teams struggle with this notion but the reality is that investors buy two main things, differentiated stories and differentiated execution. Otherwise, portfolio managers have little incentive to increase tracking error and take liquidity risk."
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