Sunday, February 14, 2016

Seeking Alpha: Keep Calm And Rock(Well) On

Cynical and sarcastic as I am, I'm nevertheless surprised when Wall Street collectively punts on a story they once dearly loved . I can understand worries that Rockwell Automation's (NYSE:ROK) margins in Architecture & Software are going to slide with weak revenue, but I can't quite fathom where the surprise about that comes from. Be that as it may, it looks like sell-side analysts are diving toward the bottom of the guidance range and taking a much more cautious approach.

It doesn't help that Rockwell management seemed more conservative on the outlook for its end-markets than the likes of ABB (NYSE:ABB) or Emerson (NYSE:EMR). Going back to that "cynical and sarcastic", I'll just mention here that the two worst-performing companies in the sector are more optimistic about the near-term outlook and the better performers (Emerson and Honeywell (NYSE:HON)) seem a little more cautious to me.

What Rockwell is hasn't changed - it's still an excellent player in industrial/process automation, with a strong presence in PLCs and strong mid-teens-to-20% share in the North American automation market. Buying Rockwell now certainly involves the risk that the automation market gets worse before it gets better, but I still think there's a compelling long-term argument here.

Read more here:
Keep Calm And Rock(Well) On

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