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ILLINOIS TOOL WORKS
O VERVIEW Industrial materials  Diversified, value-added Decentralized operating structure 8 reported segments        ...
B USINESS M ODEL8 reported segments:
B USINESS M ODELRevenues by Segment               Transportation            FY2010                                  Indust...
E CONOMIC M OAT Intellectual property Disciplined business process implementation Network effect
M ANAGEMENT Average tenure of 20 years CEO: David Speer Lean management structure
P ROFITABILITY & E FFICIENCY                   ITW          HON       UTXMarket cap.         21.3 B       39.7 B    66.4 B...
R ATIO A NALYSIS                     ITWMarket cap.                21.3 BForward P/E                 10.6P/B              ...
VALUATION
Q&A
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Illinois Tool Works (ITW) Stock Pitch

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Stock pitch for TVA Investment Challenge Portfolio at the University of Kentucky (November, 2011)

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Illinois Tool Works (ITW) Stock Pitch

  1. 1. ILLINOIS TOOL WORKS
  2. 2. O VERVIEW Industrial materials  Diversified, value-added Decentralized operating structure 8 reported segments ITW (NYSE) Mid-cap Recent share price $ 42.58 Market cap 21.3 B 52-week range 39.12 – 59.27 β(average) 1.07 % Held by insiders 0.69 %
  3. 3. B USINESS M ODEL8 reported segments:
  4. 4. B USINESS M ODELRevenues by Segment Transportation FY2010 Industrial packaging 20% Power systems & electronics 16% Food equipment 6% 14% Construction products9% Polymers & fluids 11% 12% 12% Decorative surfaces Other
  5. 5. E CONOMIC M OAT Intellectual property Disciplined business process implementation Network effect
  6. 6. M ANAGEMENT Average tenure of 20 years CEO: David Speer Lean management structure
  7. 7. P ROFITABILITY & E FFICIENCY ITW HON UTXMarket cap. 21.3 B 39.7 B 66.4 BTATO 0.98 0.90 0.95FATO 7.85 6.90 8.65FCF/Sales % 11.85 % 9.26 % 8.34 %ROE 17.45 % 25.46 % 22.23 %ROIC 13.77 % 14.30 % 14.75 %Operating margin 14.60 % 10.14% 12.81 %Net margin 9.96 % 6.88 % 7.76 %
  8. 8. R ATIO A NALYSIS ITWMarket cap. 21.3 BForward P/E 10.6P/B 2.1PEG 0.8D/E (market value) .22Current ratio 2.02
  9. 9. VALUATION
  10. 10. Q&A

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