A Number of Catalysts Could Yield Our Estimates Conservative
- Our estimates may prove conservative with 95% of Lincoln’s end-markets now trending positive, benefits from acquired Air Liquide Welding (which should add 12 cents to EPS in the second half of 2018), and a possible ramp-up in infrastructure spending domestically with the Trump Administration.
- Lincoln is #1 in the automated welding market (15% of sales), which should continue to grow around twice as fast as the core welding market, aided by a global shortage of skilled welders.
- As the global leader in welding consumables (57% of revenue) and equipment (43%), Lincoln is well-positioned to participate in developing infrastructure worldwide, including emerging markets at approximately 30% of revenue.
- Debt is now only 1.6x EBITDA, below the Company’s 1.75x-to-2.0x target, which could accelerate M&A, share repurchases and dividend increases.
Lincoln Electric Holdings is a holding company. Through its subsidiaries, the company is a manufacturer of welding, cutting and brazing products. Welding products include arc welding power sources, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories and other welding consumables and fabrication. The company's product offering also includes computer numeric controlled plasma and oxy-fuel cutting systems and regulators and torches used in oxy-fuel welding, cutting and brazing. In addition, the company is engaged in the brazing and soldering alloys market.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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