For a manufacturing capex company to grow about 12% in 2021 says there’s something pretty special going on, and such is the case for Cognex (CGNX), as this machine vision innovator drove double-digit growth despite significant weakness in one of its major markets. Auto capex should recover in 2021, though, and while growth in consumer electronics may taper off, logistics will remain a very strong opportunity.
There’s no escaping the growth-vs-value argument with Cognex shares. Growth investors will argue that valuation is irrelevant in the face of a game-changing technology like machine vision (and the ongoing automation of sectors like logistics), while value investors will just shake their heads and respond with “just wait…”.
Since my last update, Cognex shares have more or less tracked the S&P 500 and underperformed the industrial sector by about 10%, with rival Keyence (OTCPK:KYCCF) more or less tracking in line with Cognex. Valuation is still robust, but the mid-teens long-term free cash flow growth I model does actually support a prospective return in line with high-quality industrials like Nidec (OTCPK:NJDCY) and Rockwell (ROK), so I wouldn’t say that buying Cognex is completely throwing caution to the wind.
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With Auto Capex Set To Recover, Cognex Will Have At Least Three Drivers In 2021
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