Applied Industrial Technologies May Be Moving, But That's Not Enough
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Daniel JonesInvesting Group LeaderFollow5ShareSavePlay(12min)CommentsSummaryApplied Industrial Technologies (AIT) offers steady growth, robust automation exposure, and disciplined capital allocation but trades at only a fair absolute valuation.Organic growth remains weak, with recent gains largely acquisition-driven; management expects eventual revenue of $5.5B+ and EBITDA of $715M+, but provides no timeline.Net debt is low at $153.6M, reflecting prudent financial management despite an active M&A strategy and $1B+ in acquired annual revenue since 2012.I assign AIT a 'hold' rating, citing relative value versus peers but insufficient margin of safety for a more bullish stance amid recession risks. NetPix/iStock via Getty Images These days, automation is an exciting topic. When paired with the promise of AI, there is certainly a lot of opportunity here. And one company that plays in this space that, because of its headquarters in Cleveland, Ohio, is only about an hour away from where IThis article was written byDaniel Jones36.02K FollowersFollowDaniel is an avid and active professional investor. He runs Crude Value Insights, a value-oriented newsletter aimed at analyzing the cash flows and assessing the value of companies in the oil and gas space. His primary focus is on finding businesses that are trading at a significant discount to their intrinsic value by employing a combination of Benjamin Graham's investment philosophy and a contrarian approach to the market and the securities therein. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.