Sunday, June 24, 2018

A Buyable Dip In Cognex?

Being a value-oriented investor who loves technology, particularly industrial technology, often has me feeling like a stranger in a strange land. There’s never any shortage of “you can’t worry about valuation; you just have to buy!” comments, and it can indeed be frustrating to watch the expensive shares of great companies get ever more expensive and float up and away like a kid’s balloon.

But with great valuation often comes great volatility, and that can work for patient investors. Cognex (CGNX) is back where it was when I last wrote about the company, but I believe the company is a little better today, even if its near-term revenue growth opportunities are not. Although the risk of further declines in consumer electronics can’t be ruled out, nor declines in auto spending or issues in China, the valuation now looks close to reasonable and that may be about the best you can hope for, though I’d note the shares are not cheap by most metrics.

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A Buyable Dip In Cognex?

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