GTES - Gates Industrial: Further Upside Is Still Justified

2024-03-23 08:30:22 ET

Summary

• Gates Industrial Corp has seen some upside in its share price, but it has underperformed the broader market.
• The company's fundamental data shows growth in revenue and net profits, but weakness is building.
• Management expects revenue to decline in the coming year, but the stock remains cheap and additional upside is warranted.

A little over a year ago, in the middle of February of 2023, I found myself analyzing Gates Industrial Corp ( GTES ). For those not aware of the company, it operates as a producer and seller of engineered power transmission and fluid power solutions. Most of the company's products are sold on the aftermarket, but it does sell some of them directly to OEMs (original equipment manufacturers). And generally speaking, the company has done quite well. When looking at the industry in which it operates, how cheap shares were, and how well the business had done in the years leading up to that original article, I concluded that a ‘buy’ rating was logical....

For further details see: