By: Scott Davis
De-conglomeration continues to be a dominant theme in industrials, with companies across the sector under shareholder/activist pressure to simplify their portfolios. Investors are increasingly looking to isolate assets to own based on growth, risk and cash flow profiles. This is especially true in a rising ETF/passive money world where active management will hinge on differentiated (often thematic) investments. In fact, there are now more ETFs out there than actual stocks. Conglomerates which offer undifferentiated growth/risk/cash flow characteristics have largely been left behind. The lack of interest in traditional conglomerates seems to have become more acute.