The last six months or so haven’t been as kind to Nidec (OTCPK:NJDCY) (6594.T), as the shares of this leading Japanese motor company have slid about 15%, underperforming the broader industrial space. There’s always guesswork in figuring out why stocks sell off, but I think concerns about near-term weakness in autos and small precision motors, as well as a patent fight with Seagate (NASDAQ:STX), could be at least part of the problem, though the share weren’t all that cheap when I last wrote about the stock.
“Ignore the valuation and just buy” isn’t my preferred investment style, and Nidec remains quite pricey by almost any valuation approach. On the other hand, the company is still in the early days of what could be a game-changing ramp in motors for electric vehicles – not just cars, but also smaller vehicles (like electric bikes) – to say nothing of ongoing growth in the appliance and household market, as well as industrial robotics. With that in mind, this is as close as I get to a “ignore the valuation and buy” call, as I do think Nidec is a rare differentiated growth story.
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