Illinois Tool Works Inc.

“ITW is a rare industrial franchise — 80/20-disciplined, consumables-moated, and financially pristine with 85%+ ROIC and near-perfect FCF conversion — but at 24.5x trailing earnings the quality premium is fully embedded and the 10-year return path resolves to a modest 7-8% annualized, insufficient for a new entry when better-priced compounders exist; a 10-15% drawdown to the $225-240 range would transform the risk/reward and make this an easy BUY.”