Sunday, July 22, 2018

Yaskawa Electric's Earnings Report Underlines The Uncertainties In Automation

Investors looking to get a clear sense of the near-term direction of key automation segments like servomotors, drives, and robotics will need to wait a little longer, as Yaskawa Electric’s (OTCPK:YASKY) (6506.T) fiscal first quarter earnings report confirmed some worrying trends but also showed some better than expected strength in other areas.

Although Yaskawa shares are down another 10% from when I last wrote, I’m still not completely sold on the valuation argument at today’s price. This “lull” in smartphone-related capex could go on a little longer than expected, and I’m likewise concerned about the potential for weaker semiconductor, machine tool, and auto-related orders. Long term, I like Yaskawa’s position in both motion control and robotics, and the valuation is getting more interesting on an EV/EBITDA basis, but I’m inclined to stay on the sidelines here for now.

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Yaskawa Electric's Earnings Report Underlines The Uncertainties In Automation

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