Sunday, June 24, 2018

Sensata Shares Chopping In A Narrow Band Despite Better Sales

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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