Wednesday, January 13, 2016

Seeking Alpha: Rockwell Automation Punished For Being Mortal

When your biggest complaint about a stock is the valuation, that's a pretty clear signal you're looking at a good candidate for the watch list and future buy-the-dip-opportunities. I have long respected Rockwell Automation's (NYSE:ROK) position in the automation space and its strong presence in controls (especially PLCs). What I haven't liked as much has been the valuation, but the apparent realization among the sell-side and institutional investors that Rockwell is still a cyclical company appears to have created a window of opportunity.

The problem with buying the shares of a good company like Rockwell during a downturn is that you never really know how bad the decline will be. I believe the long-term drivers for automation are still very strong and that Rockwell's long-term future looks bright, but that doesn't mean that the shares couldn't see $80 again if conditions in markets like auto OEMs get really bad and margins decelerate further. If you're in a position to take the risk of short-term pain for long-term gain, though, I think this is a good time to consider these shares.

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Rockwell Automation Punished For Being Mortal

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