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How Did Lincoln Electric’s Stock Fare ahead of Its 2Q16 Earnings?

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Lincoln Electric’s stock performance

Lincoln Electric’s (LECO) stock has been trading sideways since April 2016. This can be attributed to the softness in demand, as well as weakness in the oil and gas sector and the US export markets.

From April 1–June 28, 2016, LECO fell by 2.1% and the Industrial Select Sector SPDR ETF (XLI) fell by 2.0%.

In 2015, Lincoln Electric’s earnings were impacted by unfavorable foreign currency, pension settlement, and contingent consideration related to an acquisition. However, the stock has seemed to rise since 2016 began.

LECO has gained 11.6% since January 2016. In comparison, the Industrial Select Sector SPDR ETF (XLI) has risen by ~3.6% for the same period.

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Lincoln Electric’s peer performance

From April 1–June 28, 2016, shares of The Timken Company (TKR) and Illinois Tools Works (ITW) fell by 10.3% and 1.2%, respectively. Stanley Black & Decker (SWK) has generated returns of 1.8% for the same period.

About Lincoln Electric

For over 120 years, Lincoln Electric (LECO) has designed and manufactured welding and cutting products. It has a global position in the brazing and soldering alloy market.

LECO operates in 47 manufacturing locations and provides a diverse range of products. The company’s products include arc welding power sources, wire feeding systems, robotic welding packages, and fume extraction equipment used in oxy-fuel welding and cutting.

The company broadly operates in three segments: Americas Welding, International Welding, and The Harris Product Group. These segments contributed 69%, 21%, and 10%, respectively, to total revenues in 2015. Each segment has strong brands with leading positions within their respective markets.

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