About APPLIED INDUSTRIAL TECHNOLOGIES INC
Applied Industrial Technologies, Inc. distributes industrial products in North America, Australia, New Zealand, and Singapore. It operates through two segments, Service Center Based Distribution, and Fluid Power & Flow Control. The company distributes bearings, power transmission products, engineered fluid power components and systems, specialty flow control solutions, advanced automation products, industrial rubber products, linear motion components, tools, safety products, oilfield supplies, and other industrial and maintenance supplies; and motors, belting, drives, couplings, pumps, hydraulic and pneumatic components, filtration supplies, valves, fittings, process instrumentation, actuators, and hoses, as well as other related supplies for general operational needs of customers' machinery and equipment. It also operates fabricated rubber shops and service field crews that install, modify, and repair conveyor belts and rubber linings, as well as offer hose assemblies.
In addition, the company provides equipment repair and technical support services. It distributes industrial products through a network of service centers. The company serves various industries, including agriculture and food processing, cement, chemicals and petrochemicals, fabricated metals, forest products, industrial machinery and equipment, life sciences, mining, oil and gas, primary metals, technology, transportation, and utilities, as well as to government entities. Applied Industrial Technologies, Inc. was founded in 1923 and is headquartered in Cleveland, Ohio.
AIT operates in the Wholesale Trade | Wholesale | headquartered in Cleveland, Ohio | approximately 6,100 employees | led by CEO Neil A. Schrimsher.
The $9.7B question: What happens when a company this good becomes this expensive?
In the constellation of American capitalism, certain companies shine brighter than others — not because they are inherently more valuable, but because they have positioned themselves at the nexus of forces that shape the economy. APPLIED INDUSTRIAL TECHNOLOGIES INC is one such company.
At $9.7B in market capitalization, APPLIED INDUSTRIAL TECHNOLOGIES INC (AIT) currently ranks #169 in our quantitative model, with a composite score of 77.0/100. That places it firmly in "Strong Buy" territory — our highest conviction rating.
But here's the thing about stocks priced for perfection: They leave no room for error.
The Numbers That Matter
Let's start with what's undeniably true. Our 6-factor model gives AIT the following scores:
| Factor | Score | Weight | Assessment |
|---|---|---|---|
| Quality | 84/100 | 30% | Exceptional |
| Value | 73/100 | 15% | Fair |
| Momentum | 54/100 | 25% | Steady |
| Investment | 99/100 | 10% | Growing |
| Stability | 59/100 | 10% | Volatile |
| Short Interest | 98/100 | 10% | Low shorts |
The quality score of 84/100 is the headline here. It reflects profitability metrics that would make most CFOs weep with envy:
- ROE: 21.3%
- Net Margin: 8.2%
- Gross Margin: 30.4%
These aren't just good numbers. They're the kind of numbers that make AIT a "must-own" stock for institutional portfolios.
The Bull Case
"If you could design a business in a laboratory, it would look something like AIT."
The bull case writes itself:
- Quality is persistent. Academic research shows high-quality stocks outperform by 4-6% annually over long periods. AIT is quality defined.
- Momentum is real. With a momentum score of 54/100, the stock has been recognized by the market — and momentum tends to persist.
- The moat is deep. Companies with these margins don't lose them easily. The competitive position is entrenched.
The Bear Case
But here's what keeps value investors up at night:
- Valuation compression risk. At current levels, the stock is priced for continued perfection. Any stumble — a missed quarter, a competitive threat, a macro slowdown — could compress the multiple from 24.0x to the low 20s. That's a 20-30% decline without anything fundamentally "wrong."
- The crowded trade problem. When everyone owns a stock, who's left to buy? Momentum works until it doesn't.
- Mean reversion. Trees don't grow to the sky. At some point, growth decelerates.
The Valuation Framework
| Scenario | Assumption | Fair Value | Upside/Downside |
|---|---|---|---|
| Bear | Multiple compression to 20x | -20% | Downside |
| Base | Current trajectory continues | +10-15% | Modest upside |
| Bull | Momentum accelerates | +30-40% | Significant upside |
The risk-reward is ... fine. Not exceptional. Not terrible. Just fine.
The Bottom Line
APPLIED INDUSTRIAL TECHNOLOGIES INC is exactly what it appears to be: a high-quality business with strong momentum trading at a premium price. Whether that's attractive depends entirely on what kind of investor you are.
For long-term, buy-and-hold investors, AIT is a core holding. For value investors or short-term traders, look elsewhere.
The company is priced for perfection — and in markets, as in life, perfection is a fragile thing.
⭐⭐⭐⭐⭐ Rating: 5-Star Strong Buy
Score: 77.0/100 | Rank: #169 of 3,571 stocks
Sector: Consumer Staples
This analysis reflects the views of Blank Capital Research as of February 16, 2026. It is not investment advice. Past performance does not guarantee future results.