GGG - Graco: Premium Player That Deserves A Premium Valuation

2024-06-06 14:45:29 ET

Summary

• Graco Inc. has seen significant growth and created value for investors over the past decade, delivering on solid top-line growth while persevering its steep margins.
• The company specializes in fluid and coating management systems and equipment, serving various industries and markets, and benefiting from leadership positions in niche segments.
• Despite a decline in first-quarter earnings, Graco remains financially strong with a net cash position, and management sees potential for growth through M&A opportunities.

Nearly a decade ago, I thought Graco Inc. ( GGG ) did not really offer a margin of safety, but that stance was far too conservative. An $80 stock trades at similar levels as today, but that does not account for a three-for-one stock split which took place in 2017. Investors have seen handsome returns, having tripled their investment over this period of time....

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