Fanuc (OTCPK:FANUY)
(6954) is a pretty remarkable company and a testament to the value of
figuring out those things you do very well and then just doing those
things. There are good reasons that Fanuc is the global leader in
factory automation equipment like CNC systems, robots, and controlled
machine tools. Likewise, operating margins in the 30%'s don't come by
accident, nor do returns on capital consistently ahead of the cost of
capital.
All of that said, I can't love the stock right now. Yes, I own ABB (NYSE:ABB)
shares and I'm sure there will be aficionados of lead paint lollipops
to accuse me of talking down Fanuc because that will somehow "help" ABB.
But the fact remains that capex investment related to smartphones is
still soft, China is increasingly looking to homegrown automation
solutions, and even growth assumptions in excess of what I project for
ABB aren't enough to drive a compelling fair value for this industrial
technology company.
Read the full article here:
Even As China Looks Toward Automation, FANUC Seems Pricey
