SDVKY - Sandvik: 'HOLD' Continues To Be The Right Approach

2024-05-13 12:55:05 ET

Summary

• Sandvik, a leading mining and equipment company, has experienced a decline in revenue and margins in 1Q24.
• The company's overall market trends are negative, with declining order intakes and margins in most segments.
• Despite its solid fundamentals and innovation, Sandvik's valuation remains too high, making it unattractive for investment at this time.

Dear readers/followers,

You may recall that I cover many Swedish industrial businesses, including the company Sandvik ( SDVKY ), on a relatively regular basis. The reason is that I do not want to miss out on this company if and when it becomes cheap. Sandvik is a leading mining and equipment company with good long-term growth indicators and profitability. Its active segments sales and areas are very attractive indeed, but like many Swedish quality businesses with good historical profitability, Sandvik has encountered a bit of a growth and premium problem. To that end, here are the comparative results from my previous article, where the company was a "HOLD" for me, and compared to which, the investment continues to actually underperform.

If you're interested, you can find that article here.

Taking small victories like this - and a 4-month underperformance in line with my thesis and expectations is indeed a "small" victory, is only relevant to the bigger picture if I can say that my thesis and my stance still make sense....

For further details see: