- Sandvik had a mixed second quarter; revenue, operating income, and orders rebounded sharply from 2020 levels, but were more mixed relative to sell-side expectations.
- The SMS business seems to be decelerating, but auto, aerospace, and energy customers haven't recovered to pre-pandemic levels yet, and management continues to diversify the business.
- Mining is hot now, with mining companies launching greenfield projects and refreshing their over-aged fleets; Sandvik is particularly well-leveraged to copper and gold.
- Sandvik isn't a completely clean story, but I believe the valuation reflects that, and I think the risk-reward trade-off is favorable at these levels.
For further details see:
Sandvik Dogged By Short-Cycle Concerns As Mining Recovers Strongly