China’s HollySys Automation (HOLI)
remains a frustrating stock, as the company’s inconsistent operating
performance makes it a difficult name for investors to trust. Now take
explicit guidance for the next year out of the mix and it becomes an
even murkier situation, particularly as there is not a lot of visibility
as to rail order/contract win timelines.
HollySys
still has attractive opportunities. The company is gaining share in
China’s process automation market and is starting to make a bigger push
into factory/discrete automation. Rail orders remain consistently
inconsistent, but opportunities in subways/metro should offer upside,
and the M&E business could still benefit from China’s long-term One
Belt One Road initiatives. Valuation really doesn’t look very demanding,
but consistent execution has never been a strong point to this story,
and I can understand why investors would stay clear.
Read more here:
Inconsistency Continues To Offset HollySys's Potential
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