Sensata Technologies Has Gone Nowhere Fast As Key End Markets Weaken

Although I wasn't all that interested in the valuation opportunity presented by Sensata (NYSE:ST) back in May, I missed quite a ride as the stock dropped 15%, rose almost 15%, fell another 10%+, then rallied almost 25% to end up … around 5% higher than when I last wrote about the stock. While Sensata has benefited from the recovery in both industrial and semiconductor stocks, the company continues to face difficult end-markets in autos, heavy vehicles, industrials, and appliances, and content growth can only offset that just so much.

I still really like this company, but the valuation is only "okay" now, and I think there is downside risk to the 2020 outlook given the growing weakness in heavy vehicles. Were the shares to again retreat back toward $45, I'd definitely reconsider this name for its long-term leverage to content growth in multiple end markets.

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Sensata Technologies Has Gone Nowhere Fast As Key End Markets Weaken