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Illinois Tool Works

ITWAbove valueExpectations · demanding

Held by 3 superinvestors.

Price$282.74
Holders3
Total value$101.0M

SEC 10-K · fundamentals

Business quality

as of 2025-12-31

Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.

Revenue growth
+0.9%
Net margin
19.1%
ROE
95.0%
FCF margin
16.9%
Revenue $12.57B → $16.04B · 6y
What makes a business high quality

Valuation · value band

Above fair value

$141/ sh · growth-anchored intrinsic value
margin of safety
fair value
above fair value
$283
cheaperpricier

Zero-growth floor

$73

Central IV

$141

Optimistic top

$172

Illinois Tool Works (ITW): A conservative value band $73–$172 / sh (zero-growth floor to growth-capped optimistic top); central read about $141. Today’s price sits above that band (price $283 as of 2026-08-20).

The middle figure is the main read. The right end is the optimistic case under the same conservative caps — not an absolute ceiling.

Revenue growth 3% (lower of historical trend and fundamental cap, capped by moat) · moat 20 yr · discount 10.6% · Zero-growth downside $73

Price as of 2026-08-20 · yahoo · DGS10 4.7% @ 2026-08-19.

Method & numbers

A conservative intrinsic-value band (zero-growth floor to growth-capped DCF) plus a tangible asset floor — not investment advice, not a buy/sell signal, and not a price target.

Owner-earnings DCF $99.15 – $171.59 · Greenwald zero-growth $121.12 · zero-growth base $121.12 · reproduction $2.52

Moat Franchise (moat) · terminal value 21% of present value · owner-earnings yield 4% vs 10Y 4.7%.

Graham earnings-power value (normalized NOPAT)$73.34 – $96.49 / sh

Normalized NOPAT = average operating margin over the years shown × latest-year revenue × (1 − normalized tax); then + D&A − maintenance capex (write A). Unlevered (pre-interest, attributable to all capital). Capitalized at the 9–11% rate band (read as a WACC proxy). Enterprise → equity bridge applied: + cash − total debt.

Years: TTM 2026-06-30, 2024, 2023, 2022, 2021

v1 simplifications: Maintenance capex (ok) deducted in full cash (write A): EPV = (NOPAT + D&A − maintenance capex) / WACC; no tax shield on the capex term. Share-based compensation is left as a real expense (not added back).

Buffett owner-earnings value$99.10 – $121.12 / sh

Owner earnings = average net income + average D&A − maintenance capex (zero-growth floor; no ΔNWC). Levered (starts from net income, already after interest — an equity-holder stream). Capitalized at the 9–11% rate band (read as a cost-of-equity proxy). No enterprise→equity bridge: the capitalized result is already equity value (subtracting debt would double-count interest).

Years: TTM 2026-06-30, 2024, 2023, 2022, 2021

v1 simplifications: Owner earnings = net income + D&A − maintenance capex (ok); the working-capital change is excluded (maintenance ΔNWC ≈ 0; growth ΔNWC is carried in growth value, not double-counted). One-time items are not separately normalized (multi-year averaging smooths them partially). Share-based compensation is left as a real expense (not added back); see the SBC/OE disclosure. Capitalized at the 9–11% band as a cost-of-equity proxy; no leverage premium applied (net cash or debt within the no-charge range).

Reproduction value = tangible net assets $-2.74B + capitalized R&D $644.60M（FY 2026, 2024, 2023, 2022） = $2.52 / sh. Reproduction value = intangible-inclusive net reproduction (tangible net assets + acquired-intangible reset proxy + capitalized R&D), ÷ diluted shares; tangible net assets alone are negative for this asset-light franchise.

Moat reading: Franchise test compares earnings power (EPV) against reproduction value (tangible net assets + capitalized R&D). EPV well above reproduction value signals a moat; near it, a commodity; below it, value destruction. A directional reading, not a verdict.

Assumes a wide moat · competitive-advantage period ≈ 20 years (earnings intact, ROIC stable over history).

Growth value not assessable — No positive growth reinvestment in the matured window, so ROIIC cannot be computed.

Window TTM 2026-06-30, FY 2024, 2023, 2022, 2021 · discount band 9%–11% · normalized tax 21% (Average effective tax rate over 3 year(s), capped at the statutory 21%.) · diluted shares.

Owner-earnings DCF: growth g₁ 3% · OE FY TTM 2026-06-30, 2024, 2023, 2022, 2021 · Discount band: 9.15%–12.00% (DGS10 +4.5% to a 12% strict end, as of 2026-08-19). No enterprise→equity bridge: owner earnings already flow to shareholders (post-interest), so no net cash is added and no debt subtracted — matching the engine owner-earnings lamp.

Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.

What the price is betting

Today's price pencils in about 12.3% a year in owner-earnings for the next few years. Revenue actually grew 4.4% a year.

The market wants it well ahead of its own track record.

How to read intrinsic value

SEC 13F · holders

Superinvestors Holding This Security

3 holders · $101.0M combined · this quarter +0 opened / -0 exited

This quarter1 added
Holders 2 → 3 · last 8q
  • Thomas Gayner
    Value$88.6MWeight (prev→now)0.7% → 0.7% ▼
  • Ray Dalio
    Value$12.1MWeight (prev→now)0.0% → 0.0% ▲
  • Steven Check
    Value$297,517Weight (prev→now)0.0% → 0.0% ▲

SEC 13F · notes

Written summary

Illinois Tool Works (ITW) is held by 3 of the superinvestors tracked on Compounder, with a combined $101.0M in reported 13F value. The largest position belongs to Thomas Gayner, where it makes up 0.7% of the portfolio.

Other notable holders by value include Ray Dalio (0.0% of its book) and Steven Check (0.0% of its book).

Over the latest quarter, 0 of the tracked filers opened a new position in ITW, 1 added to existing ones, 0 trimmed, and 0 sold out entirely.

Holder counts and values reflect the most recent SEC Form 13F filings, through the quarter ended 2026-06-30. Source: SEC EDGAR. A 13F shows only long US-listed positions and can lag the real portfolio by up to 45 days, so this is disclosed long ownership, not a complete picture.

How to read a 13F

SEC 13F · co-ownership

Also held by these investors

Investors holding Illinois Tool Works (ITW) also commonly hold →

ITW's price is not below its conservative value band. See current strike-zone stocks

Also on

Sources· SEC EDGAR 13F as of 2026-06-30 · filed 2026-08-14

Educational data only — not investment advice. 13F positions are self-reported and can lag up to 45 days.

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