EVENTS:   China Outlook & Global Market Implications - William Hess/PRC Macro & Song Gao/PRC Macro - 11 Nov 26   Best Equity Short Ideas Conference Call 15 - Ed Steele/Iron Blue Financials & Jonathan Telgener/Channel Dynamics & Kris Bennatti/Hudson Labs & Bradley Safalow/PAA Research & Tom Beevers/Forensic Alpha & Thomas Chanos/Badger Consultants - 12 Nov 26     ROADSHOWS: US, European and Asian SELL / SHORT Ideas - Robert Prather /Vision Research   •     10 Nov - 15 Dec 26       Buyside to Buyside Forum and Expert Calls across TMT, Consumer, Healthcare and Fintech - Andrew Peters /Revelare Partners   •   London   16 - 18 Nov 26      
Filters

The Cut

Fortnightly publication highlighting latest insights from IRF providers

Company Research

Are water industrial stocks defensive? Absolutely not.

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.

Edition 209 - 18 Apr 25

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.

Edition 141 - 05 Aug 22