Years of investing will make you paranoid, or at least highly suspicious, when you find what appear to be bargains hiding in plain sight. There are some issues with Vontier (VNT), including a business that could be more vulnerable to the shift toward electrified passenger vehicle powertrains, but given the company's pedigree (part of the Danaher (DHR)/Fortive (FTV) family tree), a good CEO, and the explicit intention of deploying capital toward growth M&A, I find the discount to fair value today to be odd.
With what looks like fair value in the low-to-mid-$40s, I do wonder what I'm missing about Vontier today. Yes, there are EMV headwinds that will weigh on growth, and the business isn't as "future-proof" as you may like. M&A also carries risk, as the company could overpay or go down roads that lead nowhere. Still, with the base business undervalued on what I think are reasonable, if not conservative, assumptions, I think this is a name to check out.
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