Shares of Dover Corporation are plummeting on Thursday after the industrial conglomerate delivered disappointing quarterly results. Their days in our portfolio are numbered. Revenue in the second quarter rose 6.8% on an annual basis to $2.19 billion, coming up short of the $2.21 billion consensus, according to LSEG. Adjusted earnings per share (EPS) in the three months ended in June totaled $2.74, topping expectations by a penny, LSEG data showed. Total orders in the period grew 16%, while free cash flow was up 24% year over year to $188 million. Dover shares fell more than 9% to roughly $195 apiece, touching their lowest levels of the year. The stock’s all-time closing high of $233.31 came on Feb. 20. It got within a few bucks of that peak in late June, before losing momentum into Thursday’s print. DOV YTD mountain Dover’s year-to-date stock performance. Bottom line We said this was a do-or-die quarter for Dover. Now that we have the numbers and conference call commentary in hand, we’ve determined it’s time to pull the plug on this investment. Accordingly, we’re downgrading the stock to a 3 rating, which we define as sell into strength. This means we’re not looking to blow out of the position into Thursday’s weakness. The results aren’t so bad that the stock is at risk of a prolonged freefall. We’re hopeful that shares should be able to stabilize, and as that occurs, we’ll look for opportunities to lighten up. We currently own 285 shares, with an average cost basis of $179.94. We trimmed our Dover position twice last month, at r oughly $214 a share on June 4 and at $224 on June 17 . Locking in double-digit profits on both sales looks better in hindsight and underscores our long-held discipline to sell shares on the way up. Even before Thursday’s report, the way Dover’s stock traded left plenty to be desired. This is a market that oscillates between wanting everything artificial intelligence infrastructure and wanting unrelated ideas, like drugmakers, health insurers and banks. Dover doesn’t seem to fit cleanly into either bucket. It has growing exposure to the data center and other multiyear investment themes, such as space and the energy transition. Some of its key products here include brazed plate heat exchangers and thermal connectors used in the liquid cooling of AI servers in data centers. It also makes bearings for gas turbines , like those made by fellow Club name GE Vernova . But as of the second quarter, these “secular growth markets” — to use Dover’s phrase — represent about 25% of expected 2026 revenue. That’s up from 20% in the first quarter, so it’s going in the right direction. But it’s still not enough to change the narrative of the sprawling company, which also sells can-making equipment, vehicle repair lifts and specialized printers used for bar codes, serial numbers and textiles. These niche businesses help the world go around, but that doesn’t mean they add up to a great investment in this current moment. Worse yet,…
Read More: We’re ready to move on from Dover after the industrial’s weak quarter