Perceptron Still Searching For Stability

As an industrial tech geek, Perceptron's (NASDAQ:PRCP) industrial metrology technology holds more than a little interest for me, as well as the revenue and earnings potential that would come from successfully unlocking the opportunities outside of the auto OEM sector. Add in the fact that industrial automation giants like Rockwell (NYSE:ROK), ABB (NYSE:ABB), and Schneider (OTCPK:SBGSY) have openly talked of the importance of sensors in the evolving automation landscape, and it's at least worth taking a look at this company.

Unfortunately, the performance at Perceptron has been disappointing for quite a long time. As other Seeking Alpha writers, including Terrier Investing, have noted, this is a company that has been struggling for traction for some time. Perceptron had $65 million in revenue in 1997, $62 million in revenue in 2007, and is on pace for around $75 million in 2017. The company has never really generated meaningful free cash flow, and despite periodic runs in the stock, the last 10 years have been lackluster at best with other similar types of plays like FARO (NASDAQ:FARO) and MTS Systems (NASDAQ:MTSC) at least offering some share price growth over the last decade.

Perceptron has some interesting technology and technological capabilities, but I question whether the company has the resources to develop them to a point where it can be any meaningful threat to companies like FARO, Hexagon (OTCPK:HXGBY), and Zeiss (OTCPK:CZMWY) outside of its core auto market. I can't and won't rule out the idea that a larger automation company (or one of its main competitors) could move to buy Perceptron, but I would caution investors to listen to industry leaders like Rockwell when they talk about the challenges of transferring automation technologies across industry silos.

Read more here:
Perceptron Still Searching For Stability

Seeking Alpha: Semiconductor Spending Looms Large For FEI

A lot of the "yeah, but's" that I mentioned in my last piece on electron microscopy company FEI Company (NASDAQ:FEIC) have come to pass. Spending on semiconductor equipment has disappointed as major fabs like TSMC (NYSE:TSM), Intel (NASDAQ:INTC), and Samsung (OTC:SSNLF) revise their plans, oil/gas demand has dried up, life science demand has been consistently inconsistent, and the company lowered its long-term revenue growth guidance during its midyear analyst day.

None of these really surprised me, particularly the guidance revision, so the impact to my valuation wasn't too extreme. There's still ongoing risk to the quarterly results given the uncertainty in semiconductor industry spending, but the valuation is pretty interesting for a market leader with multiple growth drivers. There's still a risk that the company's margin targets prove too ambitious, but at around 15% below my fair value, it's worth a closer look.

Read the full article here:
Semiconductor Spending Looms Large For FEI

Seeking Alpha: Hoya Continues To Execute Very Well, But Growth Looks Tied To M&A

Publicly-traded Japanese companies are not often lauded for their strong, shareholder-friendly operating excellence, but Hoya Corp (OTCPK:HOCPY) certainly deserves a lot of credit in that regard. Not only does Hoya have a good record of generating ROIC despite serving cyclical (and in some cases, declining) tech markets, the company has done a good job of maximizing the potential of its electronics operations while building up its healthcare/medical operations.

The lingering question for Hoya Corp is what drives the next leg of growth. Extreme ultraviolet could be an underappreciated driver for the photomask business, but lenses and endoscopes are more likely to be long-term mid-single digit growers from this point. Management has ample cash with which to execute growth-oriented M&A, but a very commendable level of price discipline could lead to a longer wait for a meaningful deal.

Follow this link to the full article:
Hoya Continues To Execute Very Well, But Growth Looks Tied To M&A

Seeking Alpha: Wall Street Continues To Prize FEI Company's Market Share And Growth Prospects

Good companies have a knack for going further than you might otherwise think, and FEI Company (FEIC) is a good case in point. This leading electron microscopy company has continued to impress investors with both its market share and growth potential as electron microscopy becomes increasing relevant to a larger group of end markets. Not exactly cheap back in September, these shares have nevertheless beaten the market in the last five months while rising more than 10%.

It is going to take a pretty ugly set of circumstances for FEI Company to ever look cheap on conventional metrics. I'm not going to argue against strong growth in markets like natural resources and life sciences, nor the growing potential of selling into key emerging markets like China. Instead, I will simply observe that I would be nervous about holding shares when the music stops and the market suddenly reconsiders just how much it is willing to pay for growth and market share, but that may not occur for many years.

Please continue here:
Wall Street Continues To Prize FEI Company's Market Share And Growth Prospects