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Columbus McKinnon: Making Progress


  • Columbus McKinnon has been slowly transforming the business in recent years, with some real (margin) success.
  • After having made it through COVID-19 quite well, Columbus is using its strength to announce a relatively large deal.
  • I like the moves made by the company, yet as expectations run a bit high, I'm leaning cautious here.
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Columbus McKinnon (NASDAQ:CMCO) is a name which I have not covered in the past. The stock surfaced on my radar as it started 2021 with a significant acquisition, one which comes at a price tag of nearly half a billion. The deal is significant and does have some impact on the business, as I'm generally quite constructive on the new direction of the company. While I'm not compelled to chase the shares here, I like the movements, and I'm happily watching the shares from here.

An Intro

Columbus McKinnon presents itself as a highly relevant, professional grade solutions company, looking to solve critical problems of its customers with regard of safety and productivity.

The company has been moving onto a trajectory to move itself from a late-stage cyclical industrial player towards a growth name focused on industrial technology. The company therefore has divested some non-core assets and bolstered its organic growth and margin profile in the meantime, appealing characteristics for any business.

In terms of the actual operations the company was a near $900 million business in 2019, generating revenues of $876 million to be more precise. The company has two large units which each are responsible for roughly 45% of sales. Crane solutions include of course industrial cranes, hoists, controls, components, and works stations, among others. Industrial products is the other large segment with industrial winches, clamps, and manual and electronic hoists. Engineered product is the smallest segment, responsible for a tenth of sales.

Targeted end markets include alternative energy, wastewater treatment plants, aerospace and defense, infrastructure, automation, entertainment, oil and gas and metals processing. The transition is not just coming from greater focus, in terms of fewer activities but results in fewer SKUs and suppliers as well, all while focusing on higher valued added activities and increased R&D investments.

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This article was written by

The Value Investor profile picture
The writer is a long term value investor and M.Sc graduate in Financial Markets with over 10 years experience. Value can be found in both long and short ideas and uses options to enhance the risk-return profile of investment ideas. Disclaimer: This article provides opinions and information, but does not contain recommendations or personal investment advice to any specific person for any particular purpose. Do your own research or obtain suitable personal advice.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any 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.

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