Matt Koranda, an analyst from Roth MKM, has initiated a new Buy rating on Standex International (SXI).
Matt Koranda has given his Buy rating due to a combination of factors that highlight Standex International’s strong capital allocation and growth potential. The company has successfully transitioned from a low-growth conglomerate to a high-growth specialty industrial platform under the leadership of CEO David Dunbar. This transformation involved strategic divestitures and reinvestments, resulting in a significant improvement in margins and return on invested capital.
Furthermore, Standex’s Electronics and Engineering Technologies segments are positioned for robust growth, driven by trends such as grid infrastructure expansion and increased electric vehicle penetration. The company’s stock is considered undervalued based on a sum-of-the-parts analysis, suggesting a fair value of $175 per share. Additionally, management’s ability to simplify the portfolio and focus on higher-return segments could further enhance shareholder value, supporting the Buy rating.