Summary
- Stanley Black & Decker is seeing real margin pains despite organic growth and cost-cutting efforts.
- The same challenging environment as 2018 is seen again in 2019.
- I like the powerful brands, diversified operations and non-demanding valuations, as I am happy to average down at these levels.
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Stanley Black & Decker (SWK) has been a name that I have followed with great interest, and I was a happy buyer at levels around $135 this past summer. For a long time, that modest position was more or less breaking even, but shares dropped 15% to $115 upon the release of the fourth quarter results, mostly on the back of a soft guidance.
Such a violent move of course warrants a review of the results, the outlook and the prospects for the business and the investment thesis, as I still consider the shares as an excellent long-term investment.
