Industrials

Report by Northcoast Research

Proclamations that the sector is "defensive" and hence a place to hide out in an environment of tariff-induced economic uncertainty are reckless, irresponsible and lack analytical rigour, according to Northcoast Research. Historically, water industrials tend to outperform in bull markets and to underperform in bear markets. Valuation helps to explain why water pure-plays like Badger Meter lag in times of market duress and ahead of a potential downward revision cycle. After all, with the Russell 2000 hardest hit among major indexes, high P/E small caps hardly seem a good place to hide out. A prudent approach for investors looking to play offense is to favour high quality names trading at discount valuations. Examples include Mueller Industries, Advanced Drainage Systems, Gorman-Rupp and Pentair. Meanwhile, investors looking to play defense should look elsewhere.

Industrials

Report by Costigan Reports

Hidden gem ignored by the street - financial results posted over the past 18 months are too good for MLI to stay under the radar. The company is capitalising on increasing demand for investment in air conditioning / air quality and is reaping the benefits from a decade of significant Capex investments. MLI has been around for 100+ years and has a track record of making money in good times and bad. It currently trades at 7.3x Bob Costigan’s 2022 EPS estimate. The share price has more than doubled since he turned bullish, yet still offers 65% upside to his 1-Yr TP of $110 and over 150% upside to his 3-Yr TP.