Yaskawa Electric Still Getting A Large Benefit Of The Doubt

It’s been a rough 2020 so far for Yaskawa Electric (OTCPK:YASKY) (6506.T). The shares have lost around a quarter of their value, and have more or less tracked the declines in the larger industrial space. While the market didn’t react particularly badly to the company’s fiscal fourth quarter results, where it missed its own operating income target by almost a third, a lot of that seemed to get priced into the shares in the months leading up to the announcement.

Even with a steep year-to-date decline, the shares sport a pretty robust valuation and many investors and analysts seem content to just roll with the punches and assume that the worst is already in sight for this factory automation manufacturer. I’m not so sanguine. I do see good long-term potential in servomotors, inverters, and robots overall, but I think the current price ignores some of the competitive risks to Yaskawa’s business, as well as meaningful ongoing challenges in many end-markets, and already prices in a very healthy recovery beyond 2020.

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Yaskawa Electric Still Getting A Large Benefit Of The Doubt