Friday, August 29, 2014

Seeking Alpha: Rofin-Sinar Still Not Up To Speed

Rofin-Sinar Technologies (NASDAQ:RSTI) remains frustratingly stuck in "muddle through" mode as waiting for a return to growth has sometimes felt like waiting for Godot. The company's performance in fiber lasers continues to be erratic and while management has made some progress with underlying manufacturing margins, improvements in demand from machine tool and semiconductor customers haven't offset weakness in consumer electronics and solar markets.

What to do about the shares, then? I still like IPG Photonics (NASDAQ:IPGP) better as a business, but back in February/March I thought that Rofin-Sinar looked a little undervalued on a relative basis. Since my last Rofin-Sinar piece, Rofin-Sinar shares have risen about five percent and outperformed its peer group (except for GSI Group (NASDAQ:GSIG)), but not by a lot. I still think these shares are undervalued on a long-term basis (assuming mid-single digit revenue and FCF growth), but the combined impact of high-end fiber laser competition from IPG Photonics and low-end competition from Chinese manufacturers is a real risk to consider.

Continue reading here:
Rofin-Sinar Still Not Up To Speed

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