The company's profitability transition could be an inflection point that justifies a strong share price gain. The future is more important for shareholders, and the share price momentum remains strong, indicating positive sentiment around the company. However, there is one warning sign in the investment analysis of Applied Industrial Technologies.

The increasing returns on a growing amount of capital is a positive sign for Applied Industrial Technologies. Investors are expecting more good things to come in the future. However, like most companies, Applied Industrial Technologies does come with some risks.

Despite lower growth expectations for Applied Industrial Technologies, the P/E ratio aligns with other companies, implying investors' willingness for exposure. A potential future disappointment may be observed if P/E realigns with growth outlook. The future earnings are not seen supporting a positive sentiment.

High insider ownership suggests alignment with shareholders, despite concerns over recent sales by the president and lack of insider purchases. Potential investors might be deterred despite promising earnings growth.

Investors show confidence in the company's future given its ROCE growth and 152% total return in the last five years. The stock is worth exploring further due to the company's ability to maintain positive trends.

The market seems to have moderated its expectations for growth as the average annual share price increase is lower than the EPS growth. The better one-year TSR compared to the five-year TSR indicates performance improvement in recent times.

The stock could be undervalued, making it a potentially good time to increase holdings or invest. This is based on its intrinsic value, expected earnings growth, and stock volatility.