Wall Street hates uncertainty and there’s plenty of that when it comes to distributors in general and Applied Industrial Technologies (AIT) in particular. With two-thirds of Applied Industrial Technologies’ verticals still growing and macroeconomic metrics like manufacturing capacity utilization, PMI, and industrial production still favorable but weakening, there’s plenty of uncertainty as to just how well the U.S. (and global) economy will perform in 2019.
AIT has done a lot to build up its business, and particularly its higher-margin fluid power business, and this a company with a strong ROIC record. I’m concerned