If you want a picks-and-shovels play on passenger vehicle electrification, advanced driver-assistance systems (or ADAS), 5G infrastructure, automation, and IoT, Rogers (ROG) might be worth a look. There’s ample competition from companies like Kyocera (OTCPK:KYOCY) and Shin-Etsu (OTCPK:SHECY) in various business lines, but Rogers has managed to distinguish itself in the past with product development, and management is keenly focused on leveraging the company’s capabilities in areas like metalized ceramic substrates, high-frequency laminates, and specialty polyurethanes/silicones to benefit from growth in those aforementioned markets.
In the four and a half years since I last covered Rogers for Seeking Alpha, the shares have outperformed the S&P 500, Kyocera, and Shin-Etsu, kept pace with the NASDAQ, and lagged the semiconductor space. Relative to my modeling expectations, Rogers underperformed on revenue growth (my primary concern at the time) but did outperform on margins.
At this point, Rogers trades like you’d probably expect a play on EV/hybrids, power electronics, and sensors would, which is to say the shares aren’t obviously cheap. Double-digit revenue growth and meaningful margin improvement from here can drive a worthwhile return, and there are certainly opportunities for Rogers to outperform, but I don’t see the shares as a huge bargain right now.
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