Munger Mode rating: 4 out of 5 — Buy. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Charlie and I have been studying Illinois Tool Works for the better part of three decades, and the more we look, the more we like what we see. Here is a company that has quietly built one of the most remarkable industrial franchises in America — 88 decentralized divisions, seven diversified segments, and a proprietary operating philosophy (the "ITW Business Model" with its 80/20 Front-to-Back framework) that has consistently produced operating margins above 25%, after-tax returns on invested capital north of 30%, and the kind of cash generation that lets management return roughly 100% of free cash flow to shareholders year after year. This is not a flashy business. ITW makes fasteners, welding equipment, commercial dishwashers, polymer adhesives, and beverage packaging machinery.
Recent filings analysed: 10-Q (2026-08-06), 8-K (2026-07-28), 8-K (2026-05-22), 8-K (2026-05-12).
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