Japan’s Fanuc (OTCPK:FANUY) has long been a major player in automation, with leading share in CNC equipment for machine tools, as well as strong share in robots and machine tools like tapping centers. Despite that leadership, I’ve been less than positive on the company at many points due to what I’ve seen as excessive investor enthusiasm and questionable choices in the past regarding R&D investments and capital allocation.
Since my last update, the shares have slid another 10% or so, underperforming the S&P 500, but more or less matching the broader industrial space and good enough for a “middle of the road” performance versus other automation plays like ABB (ABB), Schneider (OTCPK:SBGSY), Siemens (OTCPK:SIEGY), and Yaskawa (OTCPK:YASKY). I still have many concerns about Fanuc, including a possible near-term order peak, increasing competition from Chinese rivals, and underinvestment in growth areas like cobots, but the valuation is more reasonable now than it has been in a while, and that’s with what I don’t believe are “heroic” growth assumptions.
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