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TWST: Please give us an overview of your coverage in the industrial
manufacturing space.
Mr. Armstrong: I cover 20 companies in the space, ranging from large cap
companies like Emerson Electric (EMR), Illinois Tool Works (ITW),
Parker-Hannifin (PH), Eaton (ETN), ITT (ITT) and Dover (DOV), to well
known mid-cap names like Roper Industries (ROP), SPX Corporation (SPW),
Flowserve (FLS) and IDEX (IEX), to some smaller companies, like Gorman-
Rupp (GRC), Robbins & Myers (RBN), Circor (CIR) and Watts Water
Technologies (WTS). TWST: What has gone on from a business perspective so far this year?
Mr. Armstrong: So far, business has been remarkably good. I thought that
this would be a strong year, but the results for the first two quarters
have been stronger than I expected. Sales growth has been very healthy '
quite often with high single digits organically, many times in double
digits. Margins have continued to expand, and the end markets are doing
well for the most part. Oil and gas, general industrial, nonresidential
construction, commercial aerospace and chemical in particular have been
good markets for these companies. We're starting to see some strength in
power generation and power transmission as well. On the other side of
the coin, the companies that I follow that sell to the auto industry
have noted that that business remains soft, and nobody is surprised.
Residential construction is the one that's mixed. Some people have
observed it as being soft, while others have not. I would have thought
that by this point in the year, it would have been pretty soft across
the board, but that has not been the case according to what I have been
told from people out there in the field.
Tickers included in this excerpt: CIR, DOV, EMR, ETN, FLS, GDI, GRC, GWW, I, IEX, ITT, ITW, PH, RBN, ROP, SPW, WTS
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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