The Street Hasn't Fully Embraced Alps Alpine's Recovery Story

COVID-19 has made life difficult for almost everyone, and Japanese electronic component manufacturer Alps Alpine (OTCPK:APELY) (6670.T) is certainly no exception. While the company had been enjoying some solid momentum in its smartphone camera actuator business, COVID-19’s impact on the auto industry has hammered the company, leading to a poor performance since my last update. Unlike many companies that have seen a hit from COVID-19, though, Alps Alpine shares haven’t recovered to the same extent.

There are certainly long-term risks to consider here. While Alps Alpine enjoys very strong share in optical image stabilizers (or OIS), it’s a highly competitive market. Likewise, management has the unenviable task of simultaneously reducing costs in its auto business while also repositioning that business toward advanced sensing, connectivity, and human-machine interface. Still, I believe the valuation is low relative to even modest expectations, and with smartphone and auto volumes picking up for the remainder of the year, these shares could do better.

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The Street Hasn't Fully Embraced Alps Alpine's Recovery Story