Sensata (ST)
remains in a tough place, as many investors continue to believe that
this leading player in automotive sensing and controls will struggle to
generate organic growth as the auto market shifts towards
electrification. Not helping matters is a pretty lackluster recent track
record of organic growth and not much clear operating leverage.
I didn't think Sensata offered exciting value back in February,
and the shares are down a bit since then. At this level, the valuation
call is a little trickier, as I do think the shares are undervalued, but
I also understand the Street's concerns about future growth and
competition. A fairly robust R&D program gives me encouragement, and
the shares look undervalued on the basis of margins, but I do wish
there was more value apparent on the free cash flow side.
Read more here:
Sensata Shares Chopping In A Narrow Band Despite Better Sales
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