Wednesday, January 23, 2019

Yaskawa Electric Taking A Beating On Diverse Headwinds

Japan’s Yaskawa Electric (OTCPK:YASKY) (6506.T) has taken a beating over the past six months, with the shares down about a third as the emerging weakness I saw in the summer has grown into full-blown troubles across the business. With auto demand likely to weaken from here and no real near-term drivers for improved handset or semiconductor order trends, Yaskawa could be looking at a rough trough period, particularly if management won’t step up and cut costs and production in anticipation of tougher times.

When I wrote about Yaskawa back in July I thought the shares weren’t cheap enough relative to the risk, and that’s basically my position now as well. I think the shares are more or less fairly valued now, and could have some upside if conditions improve, but I really don’t expect that to happen and I think there could be more cuts to expectations on the way. The overall quality and market exposures of Yaskawa make this a name to consider for the long term, but I don’t think today is the best time to buy.

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Yaskawa Electric Taking A Beating On Diverse Headwinds

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