Sensata Still Drifting As Auto And Industrial Markets Slow

When I last wrote about Sensata Technologies (ST) in the summer of 2018, I talked about this leading manufacturer of sensors for the auto, off-road, aerospace, and industrial markets as seemingly stuck between the mid-$40’s and mid-$50’s as bulls and bears duked it out over the risk of slowing auto and industrial markets versus the opportunities provided by content growth and further operating leverage.

Not much has really changed, with the shares lagging the broader industrial sector since then and offering some buying opportunities on dips to and below $45. At today’s price in the low $50’s, I look at Sensata and sort of shrug. I like the business and the company, but the valuation isn’t a can’t miss, and while I think the risks in the auto sector are well-known, I’m not sure the same is true for the off-road and industrial parts of the business. I can certainly argue for upside to the mid-to-high $50’s, but I can also argue for the mid-$40’s, so I’m not inclined to step up here.

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Sensata Still Drifting As Auto And Industrial Markets Slow