DCI - Donaldson: Still Not Passing My Filter

2024-06-10 05:57:31 ET

Summary

• Donaldson, a manufacturer of filters, has seen continued growth and improved positioning of the business.
• The company is heavily reliant on engine products but has been positioning towards industrial markets and other sectors.
• DCI has provided a decent outlook for the fiscal year 2024 and has made acquisitions to create a more balanced mix of products.
• The transition works is substantial, which does not look very appealing amidst a premium valuation.

Last summer, I believed that Donaldson ( DCI ) was not coming through my filter. The company saw continued growth while improving the positioning of the business. Appreciating the great long-term performance of the business, I saw no reason to get involved, fearing the positioning of its dominant business lines....

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