Topic: How To Invest

Q: Pat, could you comment on Illinois Tool Works (ITW), please. Thank you. I appreciate your publications.

Article Excerpt

A: Illinois Tool Works, $237.39, symbol ITW on New York (Shares outstanding: 305.1 million; Market cap: $72.8 billion;, is a multi-industry manufacturer operating in over 53 countries. Known as ITW, the company’s diversified range of industrial products includes aerospace technology, bridges, wind turbines, restaurant appliances, packaging solutions, electronics, deep-sea welding products, and a range of automotive components such as fasteners, door handles, powertrain, and refuelling systems. ITW has a portfolio of more than 18,500 granted and pending patents. To generate value for investors, the company operates in seven industry segments: automotive products (19% of revenue); test, measurement and electronics (18%); food equipment (15%); construction products (13%); polymers & fluids (12%); welding (12%); and specialty products (11%). In 2012, ITW changed its strategy to add more shareholder value: it aggressively exited businesses and product lines focused on commodity-like markets. As a result, the company now concentrates on markets and product lines in which profit margins can be sustainably maintained by quality and service…