- Kennametal posted impressive incremental margins in the fiscal second quarter, but revenue and profits were both lower than expected, undermined by weak auto/truck demand.
- A slowdown in the short-cycle industrial recovery is a fair worry, but autos should start to improve and aero and energy are just starting their recoveries.
- Kennametal's longer-term outlook is cloudier; I think it will be harder for the company to stand out on revenue growth as its end-markets change.
- Kennametal's valuation is getting more and more interesting; I'm holding out for a wider margin of safety, but this is a name to watch as the year progresses.
For further details see:
The Case For Kennametal Is Getting No Less Complicated