Perfect growth stocks don't really exist, and even the
best secular growth stories usually see some "turbulence" at some point.
So it is with Daifuku (OTC:DFKCY) (OTC:DAIUF)
(6383.T), a global leader in material handling that is applying decades
of integrated material handling automation experience into the
rapidly-growing e-commerce/logistics/warehouse automation market. While
Daifuku has an attractive multiyear growth runway as companies
increasingly look to automate their warehouse and logistics operations,
the company has encountered some near-term challenges in profitably
penetrating the U.S. market, while cyclical challenges in autos and
electronics create their own challenges.
Daifuku is
by no means a perfect story. For starters, it's not an easy stock to
buy; I'd recommend owning the Japan-listed shares, but that may not be
an option for all investors. I'm also concerned about the cyclicality of
its auto and electronics businesses, and while I do believe the company
will be able to leverage its capabilities in logistics automation to
improve its operating margin profile, its present-day margins are not
impressive. All of that said, I believe Daifuku is positioned for
exceptional FCF growth in the coming years and the current share price
looks like an interesting potential entry point for a secular growth
story with long legs.
Read more here:
Daifuku Emerging As A Major Player In Logistics Automation
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