Is Stanley Black & Decker (SWK) a Fundamentally Strong Business?

Soumya Eswaran

Tue, Apr 15, 2025, 5:57 AM 3 min read

Investment management company Vulcan Value Partners recently released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The first quarter experienced the return of volatility. The companies’ management teams expressed a more cautious view following the recent election. Optimism has given way to uncertainty about tariffs and potential impacts on earnings, inflation, and economic growth. In the quarter, the Large Cap Composite returned -2.1% net of fees and expenses, the Small Cap Composite returned -4.5% net, the Focus Composite returned -5.8% net, the Focus Plus composite returned -6.0% and the All-Cap Composite returned -4.1% net. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its first quarter 2025 investor letter, Vulcan Value Partners emphasized stocks such as Stanley Black & Decker, Inc. (NYSE:SWK). Stanley Black & Decker, Inc. (NYSE:SWK) offers hand tools, power tools, outdoor products, and related accessories. The one-month return of Stanley Black & Decker, Inc. (NYSE:SWK) was -26.09%, and its shares lost 33.36% of their value over the last 52 weeks. On April 14, 2025, Stanley Black & Decker, Inc. (NYSE:SWK) stock closed at $60.10 per share with a market capitalization of $9.288 billion.

Vulcan Value Partners stated the following regarding Stanley Black & Decker, Inc. (NYSE:SWK) in its Q1 2025 investor letter:

"We purchased three positions during the quarter: Medpace Holdings Inc., Stanley Black & Decker, Inc. (NYSE:SWK), and TPG Inc. Stanley Black & Decker is a manufacturer of tools and industrial fastening products. Brands include DEWALT, Black & Decker, Craftsman, Stanley, Lenox, Cub Cadet, and Troy-Bilt. Its Tools and Storage segment makes up 90% of company revenue which includes power tools, hand tools, and outdoor equipment. The remaining 10% comes from its Engineered Fastening segment, which includes fasteners, rivets & welding equipment for the automotive, aerospace and industrial markets. The company has strong brands, high market share, and global scale. Stanley Black & Decker’s earnings have been under pressure for the last several years due to Covid related supply chain issues and difficulty integrating acquisitions. More recently, higher interest rates have depressed housing demand, which in turn has reduced demand for its core tools business. Going forward, we expect the company’s cost restructuring plan to underpin strong earnings growth. In addition, the company’s renewed focus on investing in organic growth gives us confidence that the company has a long runway to deliver more consistent earnings growth. Recent announcements about tariffs could slow the company’s progress but it does not change our fundamental investment case."