Evidence continues to mount that conditions in China, and to a lesser extent other regions around the world, are not good. Nidec (OTCPK:NJDCY)
(6594.T) has seen a withering decline in auto business in the last
couple of quarters, with weakness spreading beyond autos into consumer
appliances and various industrial markets. At the same time, though,
Nidec continues to build for its future – globalizing its production
capabilities and logging significant inquiries for its electric vehicle
traction motors.
Nidec isn’t quite as cheap as I
might wish, and I think this macro malaise could linger on a little
while longer than the Street presently expects, but I think this is a
very good company now trading at a reasonable valuation. In addition to a
major opportunity in EV motors, I believe Nidec is leveraged to ongoing
growth in brushless motors, robotics, and data centers, and could
deliver meaningful operating leverage with this latest efficiency
initiative. Looking past the rocky near-term, I think these shares could
be 10% undervalued today and that the shares could re-rate meaningfully
higher as 2019 moves on if and when the outlook for China improves.
Read more here:
A Sharp Downturn In China Seizing Up Nidec's Growth Engine
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