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Stock Strategist

Parker Hannifin's Value Still Invisible

The market has yet to reward this firm for its decade of diligent work.

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Parker Hannifin (PH) has spent the last decade retooling and renovating its portfolio, allowing for a stronger foundation for cash generation and growth. This effort has largely gone unrewarded by investors, with the firm currently sporting the lowest forward P/E ratio in our diversified industrial coverage universe. We think this oversight by the Street provides an opportunity to invest in a top-notch, narrow-moat firm with durable competitive advantages.

A Lean Machine
In 2001, newly minted CEO Don Washkewicz laid out the company's "win" strategy, aimed to improve the company's financial performance, customer experience, and profitable growth platforms. The brunt of this work was done during two recessions, but Parker has managed to move out of the bottom of the operational pack in the last decade.

Daniel Holland does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.