Atlas Copco Muddling Through, But At A Richer Valuation

As was the case with so many industrial names, investors had a nice buying opportunity with Atlas Copco (OTCPK:ATLKY) early this year. I liked the stock back in January, and the ADRs are up about 40% since then - more or less matching Sandvik (OTCPK:SDVKY), Metso (OTCQX:MXCYY), Eaton (NYSE:ETN) and Caterpillar (NYSE:CAT), but edging out other industrial/tool names like Ingersoll-Rand (NYSE:IR), Stanley Black & Decker (NYSE:SWK), and Graco (NYSE:GGG).

Also, as is the case with so many high-quality names (and I'm thinking of companies like Honeywell (NYSE:HON), 3M (NYSE:MMM), and the like here), the improvement in the share price of Atlas Copco seems to have outpaced the improvement in business outlook. I continue to believe Atlas is an excellent company, and the total returns from here don't look awful, but it comes up short of my 10% total return target, and I'd rather wait on the sidelines in the hope of a better price.

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Atlas Copco Muddling Through, But At A Richer Valuation