Thursday, September 10, 2015

Seeking Alpha: 'Steady As She Goes' Unlikely To Change The Sentiment On ABB

While some company boards seem to go to great lengths to accommodate institutional investors with their corporate strategies, others are more willing to endure skepticism and outright criticism in the pursuit of what they believe to be the right strategy. Time will tell if ABB (NYSE:ABB) is right to ignore calls to break up the company and/or dramatically remake this large power and automation equipment company, but today's Capital Markets Day makes it pretty clear that the board is not seeking to significantly change the direction of this company.

I view ABB's commitment to its strategy as a good news/bad news sort of dilemma for investors. In the short term, "same as it ever was" is not going to change the tone on this company. A tone influenced to no small degree by the significant weakness in the automation market, the as of yet unconfirmed recovery in power, and the company's less than stellar record of investing in innovation. Longer term, though, I continue to believe that the company's positions in power and automation are more valuable than the skeptics acknowledge and that low-to-mid single-digit growth is enough to support a fair value in the mid-$20s for the ADRs.

Continue here:
'Steady As She Goes' Unlikely To Change The Sentiment On ABB

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