Wall Street is an expectations game in the short term, and I think that’s likely the best explanation for Lincoln Electric’s (LECO) roughly 10% move over the past couple of weeks (including a 4% move after reporting second quarter earnings). Management’s relatively calm guidance certainly didn’t hurt, but underlying results weren’t so strong and I’m a little surprised that the Street took a margin shortfall without much consternation.
I do believe that Lincoln is a quality company and certainly a high-quality industrial, and the shares have done well over the long term