Yaskawa's Results Suggest A More Uncertain Recovery Than The Valuation

I expect that third quarter commentary will be all over the map where industrial companies are concerned, with some markets in some regions improving, but not a lot in the way of universal or reliable trends. That was certainly the case for Yaskawa Electric’s (OTCPK:YASKY) fiscal second quarter earnings (for the quarter that ended at the end of August), as semiconductor and smartphone-related demand remained healthy, but demand recoveries elsewhere were sporadic or regional at best.

Yaskawa’s shares have had mixed performance since my last update, with the ADRs doing a bit better on forex moves, but both the ADRs and the local shares underperforming the industrial sector as a whole. I thought the shares were in the “too far, too fast” bucket before, and that’s still basically my feeling now. While I’m bullish on the longer-term opportunities in servos, inverters, and robots, that’s amply reflected in the share price. As more of a directional/momentum play on China, I understand investor interest in Yaskawa, but the financials do give some reason for pause.

 

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Yaskawa's Results Suggest A More Uncertain Recovery Than The Valuation