Wednesday, July 20, 2016

Seeking Alpha: HollySys Hanging On, But The Rope Is Slippery

HollySys (NASDAQ:HOLI) has been doing better than I thought it would. Companies in the automation space have recovered pretty well from the doldrums of late 2015/early 2016. While HollySys has lagged the likes of ABB Ltd. (NYSE:ABB), Rockwell (NYSE:ROK), Honeywell (NYSE:HON), and Emerson (NYSE:EMR), the 10% rise in the stock price since my last update is better than I would have expected given the ongoing pressures and challenges in China.

To be sure, the path ahead for the company is not smooth. China, HollySys's largest automation market, has put the brakes on new coal-fired power gen in many parts of the country, and it doesn't seem as though high-speed rail orders are going to come roaring in at a strong pace. Expansion into new process automation, discrete automation, and rail markets should keep HollySys growing, but the stock's apparent undervaluation does come with above-average risk.

Read the full article here:
HollySys Hanging On, But The Rope Is Slippery

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