Although Hexagon AB’s (OTCPK:HXGBY) business mix can be a little confusing to newcomers, the company’s focus was pretty succinctly summed up on a slide from the 2019 Capital Markets Day – “position, track, and/or control anything, anywhere”. With a collection of hard-to-replicate assets in computer-aided design and simulation, strong geospatial information technology, strong metrology, and integration capabilities, Hexagon has the key software pieces (augmented/driven by some hardware) to bring end-to-end automation to a range of industries and sectors, including construction, mining, civil infrastructure management, and manufacturing.
As a predominantly industrial software company, you can look at names like Roper (ROP) to get some general sense of what valuation and Street expectations are like. These shares aren’t cheap by conventional means, but there is increasing scarcity value in industrial automation/digitalization assets, especially on the software side, and with Schneider (OTCPK:SBGSY)/AVEVA (OTCPK:AVVYY) recently paying 10x trailing sales for OSIsoft, and Emerson (EMR) paying a similar amount for Open Systems International, I can’t say that a little over 6 times trailing revenue is absurd.
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Hexagon AB Is One Of The Prime Automation Players You Should Know
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