I’ve been long SWK for a few months, but should’ve been longer for that, as it WAS my kind of company. After the merger last spring, the company wad continually generating strong free cash flow, raising dividends, and enjoying strong moves on earnings beats.
The company beat earnings tonight, but the beat was due to a better tax rate. Margins fell YoY due to inflation (20 bps), and the company didn’t raise the amount of cost synergies from the Black & Decker merger, which I was hoping for. I’m up about 12% or so on the position, excluding dividends, but I may be hitting the nail on this position, if I don’t like the price action tomorrow during the conf. call.
Price action will tell you how the fundamentals are being perceived, and in this 28 year old’s opinion, the fundies look to be changing.
