“How much should numbers matter?” is not a new question in investing, but Siemens (OTCPK:SIEGY) provides an interesting case study. By just about any metric, Siemens has mediocre-to-weak margins, ROIC, ROA, ROTA, and so on when compared to other multi-industrials, including peers in the electrification and automation space like ABB (ABB), Eaton (ETN), Emerson (EMR), Rockwell (ROK), and Schneider (OTCPK:SBGSY). But it also has strong market positions (if not leadership) in many attractive growth areas, including automation (factory and building), digitalization, electrification, and healthcare.
I’m generally a big believer in the idea of skating to where the puck is going to be – in other words, not letting weak trailing/current results overshadow what you think the likely future trajectory will be. Still, in looking for reasons why Siemens continues to look undervalued, I do think the relatively poor profitability metrics are worth noting, but I think leverage to growth markets and improved profit/FCF opportunities counts for more, and this is still a stock worth considering.
To read the full article, click the link:
Siemens' Ongoing Underperformance Is Curiouser And Curiouser
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