ITW - Is Illinois Tool Works Stock a Buy?
Illinois Tool Works (NYSE: ITW), often known as ITW, is one of those brands that you may not have heard of despite it being all around you. Consumer products like zippers in clothing, resealable food packaging, multi-pack ring carriers for beverages, components for automobiles, and fastening systems for construction are just a few of the markets and products that make up this over 100-year-old company's portfolio. Despite 2019 being the largest one-year gain in the stock market since 2013, ITW outperformed both the S&P 500 and the Industrial Select Sector S&P Depositary Receipt Exchange-Trade Fund, or SPDR ETF (NYSEMKT: XLI). Is the run over? Or is Illinois Tool Works stock still a buy?
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You've probably heard of the expression that 80% of a company's revenue comes from 20% of its customers. It's generally a good rule of thumb and one of the many reasons why companies invest so much of their time and money increasing business from existing customers. Reward systems, memberships, and subscription models are all techniques that support this business model. ITW's strategy takes it a step further through a principle it calls "80/20 enabled." According to the company, they "draw deep insights from our key customer relationships, and then focus our efforts on designing and patenting new products and components that solve their specific challenges." It's a mindset that seems to be working, as ITW has amassed around 20,000 patents in total.