Has Gardner Denver, Inc. (GDI) Become the Perfect Stock?

Gardner Denver, Inc. (NYSE:GDI) makes a variety of different products for industrial use, ranging from compressors and blowers to vacuum pumps. With engineered products for the oil and gas industry, though, Gardner latched onto what became a high-growth area in recent years. But in its most recent quarterly report, Gardner Denver, Inc. (NYSE:GDI) noted a challenging environment for its petroleum and industrial pump segment, especially noting macroeconomic conditions as reason for it to implement moves like restructuring its European operations and implementing cost-control measures.

But the big news for Gardner through the year has come from talk of a proposed buyout. After the company said in October that it was considering strategic alternatives, many investors believed that SPX Corporation (NYSE:SPW) would make a bid for the company. But in December, it became clear that buyout talks with SPX were off the table and that the company would need to consider other bids from private-equity firms.

More recently, KKR & Co. L.P. (NYSE:KKR) came forward with a new $75-per-share bid for Gardner. With pressure from activist investors to accept a bid, Gardner Denver, Inc. (NYSE:GDI) may nevertheless hold out for more, especially if reports that SPX had planned to offer $85 per share prove true. Analysts believe that a price in the upper $70s is more likely to be the maximum possible.

For Gardner to improve, it would need to refocus on its core business operations. Until buyout talks get resolved, the distraction will make it tough for Gardner to get closer to perfection.

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The article Has Gardner Denver Become the Perfect Stock? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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