Leveraged to recovering auto demand, and having addressed Street content growth worries at least twice in the last few years, Sensata Technologies (ST) has done well both since my last update and over the past year. Margin leverage and capital allocation priorities now seem to be the newest concerns on the stock, but I believe management will answer the doubters again, though it may take a couple of years.
Sensata doesn't get noticeably cheap on a DCF basis all that often, and I see the shares as more or less fairly-valued by that metric. Still, the shares do again look undervalued on a margin/return-based multiple approach, and I believe investors can reasonably expect a high single-digit total annualized long-term return from today's price.
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