[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  LTValue [@qualitybargain](/creator/twitter/qualitybargain) on x 2284 followers Created: 2025-07-08 07:26:43 UTC $ITT is a mid-cap industrial compounder that I like, will be looking to add if we get any market weakness (e.g. more tariff shocks) and see weakness in cyclical/industrial names. Quite a boring business in not very sexy end markets (e.g. auto brake pads, critical safety components for trains, industrial pumps/valves, and industrial connect/control components like actuators, monitoring devices, connector plugs, and switches) and don't see it talked about very often. Have a look at May-25 investor day where they give 2030 targets for base organic business growth as well as bullish outlook for M&A contribution It's mostly a margin story led by 1) productivity gains (rolling out lessons learned on optimising factories from Motion Technologies to other two segments), 2) pricing (apparently this business used to apply blanket price increases across all products, which is silly, and have now invested in the right resources/data to be able to do value-based pricing), and 3) operating leverage on volume. Then also the business mix will shift away from auto OE (which is XX% of total today from their brake pad business, still a good business with ~30% ROIC and growing market share every year but has ~-1-1.5% price and volume whips around based on auto volumes) and more towards niche industrial components in industrial flow and aerospace/defence connectors. Target is >$11 of EPS in 2030 which already gets you +HSD vs. consensus today, not taking into account accretion from ~$600m of M&A they plan to do annually from 2025-2030 (but does include guided buybacks to reduce share count by -3.5%; have guided that M&A impact likely to drive EPS >$12 by 2030). Think likely this will re-rate slightly higher towards territory of a more well-known industrial compounder like e.g. Ingersoll (ITT ROIC of ~20% and FCF margin getting towards ~15% is pretty good) of around 24-25x NTM PE. In which case this has potential to do ~20-25% IRR from here (without any credit for M&A). Also a good management team with a clear vision, history of operational excellence (e.g. increasing margins through productivity, cleaning up the asbestos liabilities mess, etc.) and of doing value-enhancing acquisitions (e.g. kSARIA and Svanehoj both look like great additions). XXXXX engagements  **Related Topics** [boring](/topic/boring) [tariffs](/topic/tariffs) [$itt](/topic/$itt) [Post Link](https://x.com/qualitybargain/status/1942485483201912995)
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LTValue @qualitybargain on x 2284 followers
Created: 2025-07-08 07:26:43 UTC
$ITT is a mid-cap industrial compounder that I like, will be looking to add if we get any market weakness (e.g. more tariff shocks) and see weakness in cyclical/industrial names.
Quite a boring business in not very sexy end markets (e.g. auto brake pads, critical safety components for trains, industrial pumps/valves, and industrial connect/control components like actuators, monitoring devices, connector plugs, and switches) and don't see it talked about very often.
Have a look at May-25 investor day where they give 2030 targets for base organic business growth as well as bullish outlook for M&A contribution
It's mostly a margin story led by 1) productivity gains (rolling out lessons learned on optimising factories from Motion Technologies to other two segments), 2) pricing (apparently this business used to apply blanket price increases across all products, which is silly, and have now invested in the right resources/data to be able to do value-based pricing), and 3) operating leverage on volume.
Then also the business mix will shift away from auto OE (which is XX% of total today from their brake pad business, still a good business with ~30% ROIC and growing market share every year but has ~-1-1.5% price and volume whips around based on auto volumes) and more towards niche industrial components in industrial flow and aerospace/defence connectors.
Target is >$11 of EPS in 2030 which already gets you +HSD vs. consensus today, not taking into account accretion from ~$600m of M&A they plan to do annually from 2025-2030 (but does include guided buybacks to reduce share count by -3.5%; have guided that M&A impact likely to drive EPS >$12 by 2030).
Think likely this will re-rate slightly higher towards territory of a more well-known industrial compounder like e.g. Ingersoll (ITT ROIC of ~20% and FCF margin getting towards ~15% is pretty good) of around 24-25x NTM PE.
In which case this has potential to do ~20-25% IRR from here (without any credit for M&A).
Also a good management team with a clear vision, history of operational excellence (e.g. increasing margins through productivity, cleaning up the asbestos liabilities mess, etc.) and of doing value-enhancing acquisitions (e.g. kSARIA and Svanehoj both look like great additions).
XXXXX engagements
