Donaldson (DCI)

DCI is a solid mid-cap industrial with a strong long-term track record. Filtration isn't glamorous, but the company has performed well, with shares up 34% over the past year. It trades at 22x earnings with a 1.31% yield and maintains a healthy balance sheet. EPS growth is expected in the 10%+ range, though the recent quarter disappointed and weak guidance triggered the stock's largest single-day decline in six years. EPS guidance was lowered to $3.93-$4.01 from $3.95-$4.11. A modest reduction. The stock may drift near-term, but they would view it as a buy for long-term investors. Unlock Premium - Try 5i Free

DCI is an $8B market cap company, trading at 19X earnings. The balance sheet is fine, and it has shown quite consistent slow and steady earnings growth. Shares are up 123% in the past 10 years. The recent quarter was solid and it raised guidance for the fiscal year. Insiders do not own much, but it has been buying back stock, with 14M fewer shares in the past decade. Its filtration and emissions business may not be sexy, but the company is solid. 
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Manufactures filters for trucks and tractors. A great call on the global industrial recovery that we think we are going to see. Expects earnings are going to grow very rapidly. Have been investing a lot of money in both China and Europe, buying new distributors. Very, very innovative. Great growth story. Yield of 1.6%.

Makes filters for tractors, trucks, office buildings. With the push towards increased air sensitivity and the need for cleaner air, this one is a long-term winner. Have global distribution. Great, great long-term growth story. Great company and he would love to own it but he doesn’t find it enough of a compelling value given the risks that exist out there right now.