While many industrial companies used the third quarter earnings cycle to talk down expectations for 2020, Rockwell Automation’s (ROK)
strong beat-and-raise quarter seemed to stoke optimism that the end of
this cyclical slowdown is in sight and the company will return to growth
relatively soon. As a well-loved name among the industrials, that
newfound optimism has launched the shares about 25% from their
pre-earnings level.
When I last wrote about Rockwell,
I suggested considering the shares if/when they slipped below $150, and
they subsequently did for a couple of weeks. If you bought then, you’ll
already sitting on healthy gains, but also holding a stock that is back
to a premium valuation despite a trend of shrinking outgrowth versus
the industry in recent years and plenty of concerns still in play
regarding 2020. The prospective returns here aren’t the worst among what
I follow, but there definitely are names with more interesting
valuations.
Read more here:
Rockwell Automation Shares Spike As Investors Play A Favorite For The Recovery
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