Tomkins PLC ADRTKS

Morningstar Rating

Stock Research and Analysis

by David Manger

Tomkins is a market-leading supplier of parts for the automotive and construction industries. However, because these industries suffer from cyclical downturns, pricing pressure, and rising raw-material costs, we think the firm lacks an economic moat. Read more

Bulls Say

The company's Lasco Bathware is a strong brand in the residential construction industry. Lasco accounts for about one fourth of all baths manufactured in the United States.

European regulations mandating that vehicles be equipped with remote tire pressure monitoring systems should benefit Tomkins' Schrader Electronics, which is the market leader for the devices.

In its industrial business, the company is attempting to improve profitability by increasing its service offerings for stationary engines within plants, in addition to parts sales.

Through the Gates brand, the company is the world's largest manufacturer of power transmission belts for industrial and automotive applications, holding a 50% market share. Read more

Bears Say

Tomkins, like most parts suppliers, has difficulty passing on costs to OEM customers and faces intense competition.

The company operates in two of the hardest-hit industries in the U.S.--automotive and construction--with little evidence of a near-term turnaround.

Recent consumer spending declines in North America and Europe have affected the company's resilient automotive aftermarket business. Read more

Strategy

The company is leveraging its strong brands and global manufacturing capabilities to expand into emerging markets such as Asia and the Middle East in attempt to reduce its dependence on North America. Read more

Management

James Nicol took over as CEO in 2002. Before joining the company, Nicol worked at Magna International MGA, where he was COO. We believe Nicol and his management team have successfully realigned the company's focus with its core competencies by selling Read more

Profile

Based in England, Tomkins is a mini manufacturing conglomerate that engineers and manufactures products worldwide. The company operates through six units organized into Read more

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