John Inch on ITT

"ITT, which was once a sprawling conglomerate, has been on a dismantlement path since the 1980s. Current CEO Steve Loranger has continued this trend despite his aspiration to build a premier multi-industry company. Loranger has divested ~10% of ITT over the past ~2 years.

We favorably view ITT's leading defense and water/wastewater businesses and believe they could garner premiums to average comparable transactions. In turn, we calculate this could yield up to ~$100 per ITT share or more.

We do not expect Steve Loranger to pursue dismantlement in the next 1-2 years. However, with larger (unrelated) acquisitions likely off the table, the dismantlement writing may already be on the wall. Moreover, considering current elevated defense industry valuation multiples, the dismantlement "window" may not remain open for an extended period. At minimum, Steve Loranger could face increasing pressure to realize ITT's elevated valuation potential at a more rapid pace given the substantial premium he could realize by dismantling ITT."

This sounds very appealing with the stock trading at $60.