Wednesday, 1 December 2010

Rotork plc vs Andritz AG: capital equipment got back

Vacqueyras. Rasteau. Cornas. And, of which the pic is a recent shot, Gigondas. Lots of 'as' amongst the côtes-du-rhône appellations. Both in name and liquid these are red meat tamers.

Which brings me to assorted capital equipment manufacturers. Heavy economic metal equivalents of a muscular 14% Gigondas.

UK engineer/manufacturer Rotork plc is exposed to diversifed markets by geography and type. Encouraging half year results, a strong balance sheet, decent cash management and a tempered outlook comment by management are all positives. Yet its equity is comparatively (see below) unloved.

Austrian firm Andritz AG has similar financial traits, is thrice the size and has an equity performance Rotork can only look at in either askance or jealousy. I did wonder about managers who describe the US housing market as "still very moderate" in commenting on general economic conditions. But this reveals itself later in the reporting text as diplomatic code for "still FUBAR".

One or the other equity ought to give. Short ANDR.VI @ €61.93 / Log ROR.L @ £15.85.

Separately, the online tracker service at right is kaput. Replacement thoughts ongoing.


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