Illinois Tool Works (NYSE:ITW) reported some eye-popping Q1 results. Even factoring out some one time tax events which they do point out the growth rates are stellar. So when a company catches an express ladder up do they caution you that this may not continue or do they play to market greed and urge investors to believe they are on a great ride.
Well if you communicate with investors and say we are on a great ride you need to explain why. So lets take a look at some of the quotes and watch the positioning.
David B. Speer, chairman and chief executive officer: “Our total revenue increase of 17 percent was driven by double-digit organic growth, underlying both the strength in many of our worldwide end markets and our ongoing market penetration gains. We believe that most of our end markets will remain relatively strong throughout the remainder of 2011.”
Thats it for analysis. No further comments or critical evaluation. Just hang onto your hat and hope it all works out.In the same earnings release the investor relations people added in this little clause.
“With nearly 100 years of history, Illinois Tool Works Inc. is a Fortune 200 global diversified industrial manufacturer. The Company’s value-added consumables, equipment and service businesses serve customers in developed as well as emerging markets around the globe. ITW’s key business platforms, including welding, automotive OEM, industrial packaging, food equipment, construction, polymers and fluids, test and measurement, electronics, decorative surfaces and automotive aftermarket…”
Usually broadly based companies operating in multiple products and multiple markets are able to parse and segment their operations and convince investors they are on the job everywhere. ITW does not play by the same rules.
Disclosure: “George Gutowski” operates from a “Caveat Emptor Perspective” I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.
- Is Illinois Tool Works’ Stock Cheap by the Numbers? (fool.com)
- CORRECTED – UPDATE 1-Illinois Tool EPS misses by 1 cent (reuters.com)
- Are tools, iron in Warren Buffett’s sights? (reuters.com)
- 5 Stocks Buffett Would Love (blogs.forbes.com)