Electrical Equipment & Multi-Industry
Tax reform, regulatory relief and Infrastructure spending in a Trump administration should all serve to break the negative feedback loop that Industrials and capital spending have been stuck for years. Instead, “animal spirits” could be sparked creating a positive feedback loop of investment and risk-taking. We are especially positive on discrete automation as a way to play re-investment back into the USA. While Industrials have had a powerful rally, we continue to have a positive bias on our group.
There are several common themes across our top picks. They have favorable short-cycle exposure (ROK, PH, HUBB) or infrastructure and construction exposure (JCI, IR). They are all well-positioned to capture incremental upside as markets turn positive due to previous restructuring actions and to drive organic growth on improving backlogs. This group also has either good balance sheet capacity (ROK, IR, HUBB) or synergies (JCI, PH) from recent or pending deals to increase shareholder value.
- Rockwell Automation Inc (ROK)
- Parker Hannifin Corp (PH)
- Johnson Controls, Inc. (JCI)
Jeffrey T. Sprague
May 25, 2017
EE/MI: EPG WRAP UP - FAVORITE IDEAS, GE BATTLING THE BUCK, MACRO FAVORABLE
Favorite Ideas Out of EPG
May 23, 2017
EE/MI: EPG DAY 2 - PORTFOLIO MANAGEMENT
Dover - Numbers Likely Going Higher
May 22, 2017
EE/MI: EPG DAY 1 - POSITIVE TONE, NO REVELATIONS
Fortive - Seeing Continued Short Cycle Pulse