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.
Continue here:
Rockwell Automation Punished For Being Mortal
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