2015 All-America Research Team: Machinery, No. 3: Stephen Volkmann
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2015 All-America Research Team: Machinery, No. 3: Stephen Volkmann

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Maintaining the No. 3 spot he has held since 2013 is Stephen Volkmann of Jefferies.

< The 2015 All-America Research Team

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Stephen Volkmann

Jefferies

First-place appearances: 0


Total appearances: 9


Analyst debut: 2001


Maintaining the No. 3 spot he has held since 2013 is Stephen Volkmann of Jefferies. Of the 18 stocks in the researcher’s coverage universe, tool and machine parts manufacturer Kennametal of Latrobe, Pennsylvania, is one favorite. He raised his rating on the name from hold to buy in May, on optimism about the prospects for a corporate turnaround despite currency-related challenges and softening end markets. Donald Nolan, who was appointed Kennametal’s president and CEO in November, has “a plan to restructure both its portfolio and its operations,” says Volkmann, 53. Although Kennametal’s stock had tumbled 22.8 percent by the middle of last month, to $26.91 — trailing U.S. machinery companies overall by 10.2 percentage points — the analyst remains upbeat and believes that a price of $45 is justified. He also continues to encourage investors to buy Ingersoll-Rand, long a preferred name in this group, in part on the diversity of the Irish industrial technologies producer’s earnings stream. In March, with the New York Stock Exchange–listed shares at $67.79, he boosted his price target from $75 to $78. They jumped 23.1 percent during the preceding 12-month period, leading their peers by 25.5 percentage points, but had by mid-September tumbled 18.9 percent, to $54.95, against the sector’s 10.8 percent drop. Volkmann is standing firm, however, advising that investors are insufficiently appreciating the potential for Ingersoll-Rand’s high-margin refrigerated transportation business and the value of the company’s exposure to improving construction markets. “Steve has a solid top-down approach and is always helpful in providing access to managements,” attests one institutional ally.



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