Seeking Alpha: Aspen Technology - Trees Don't Grow To The Sky

I'm a fan of the industrial and process automation sector, as I believe automation is a major factor in reducing operating costs across a variety of industries. As a leading provider of process optimization software, and one of the very few that is not captive within a much larger company, makes Aspen Technology (AZPN) a company worth knowing.

Valuation is problematic here. A forward EV/EBITDA ratio of over 31 and a forward EV/revenue ratio of over 10 certainly underline some of my concerns. Even though potential long-term free cash flow growth of 10% is quite attractive, it takes some pretty unconventional thinking to argue that Aspen is any kind of bargain today.

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Aspen Technology - Trees Don't Grow To The Sky

Investopedia: Expectations Seem To Be A Bigger Problem For Emerson

I'm starting to feel a little sympathy for the management team at Emerson (NYSE:EMR). While the recent financial performance from this industrial conglomerate hasn't been that great, it increasingly seems to me that a lot of the Street just waves off management's cautious commentary. If the Street is building up expectations ahead of what Emerson's own people say they're likely to do, I can't really fault the management for what happens.

In any case, I still think investors are too bullish on Emerson's prospects. I do believe the Climate business is do for a solid rebound and I like the company's underlying order trends in automation, but I do worry both about the company's long-term competitiveness in automation and whether expectations are still too high. At this point, I'd still not be a buyer of Emerson.

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http://www.investopedia.com/stock-analysis/080713/expectations-seem-be-bigger-problem-emerson-emr-abb-hon-etn.aspx

Seeking Alpha: Schneider Bids For Invensys, Throws A Big Rock In The Pool

Whenever you throw a rock into a pool, you produce ripples. So too will Schneider Electric (SBGSY.PK), I think, with its announced bid for automation and process control rival Invensys (IVNYY.PK). With its rail business sold to Siemens (SI) and its pension issues cleaned up, Invensys is an appealing target for any company that wants to add scale in automation and process control, to say nothing of grabbing one of the best industrial software businesses around.

The question is whether or not Schneider's GBP 5.05/share bid gets the job done. This bid is already pretty fair (perhaps even more than, if you don't believe Invensys can/will improve its margins), but there aren't too many properties that can offer what Invensys can to a strategic buyer. Consequently, while there are many reasons why Emerson (EMR), ABB (ABB), Honeywell (HON), and General Electric (GE) wouldn't bid, I'd be very surprised if Schneider gets Invensys without fending off at least one rival bid.

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Schneider Bids For Invensys, Throws A Big Rock In The Pool

Seeking Alpha: Hollysys Looks Like A Name To Watch In Emerging Market Automation

Investors do well to hold on to a thorough skepticism when it comes to small Chinese companies, but Hollysys Automation Technologies (HOLI) looks like a name that aggressive investors should get to know better. While it is a lofty goal indeed to say that Hollysys could become the next ABB (ABB), Siemens (SI), Emerson (EMR), or Rockwell (ROK), Hollysys has already shown that it can carve out a meaningful niche against these large foreign competitors in China's fast-growing automation market.

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Hollysys Looks Like A Name To Watch In Emerging Market Automation

Investopedia: A Siemens Shopping List

Following its rivals ABB (NYSE:ABB) and General Electric (NYSE:GE), it looks like Siemens (NYSE:SI) is preparing to pull out its wallet and try a little more growth-by-acquisition. In an interview with the Financial Times, the conglomerate's CFO Joe Kaeser said that the company had reached a point of "management maturity" and was looking to do deals in the power network and/or plant automation markets worth potentially billions of dollars.  

This is an interesting move for this management team. CEO Peter Loescher has earned high marks for cleaning up and transforming this company and putting it back on a credible growth path. What makes this decision a little more surprising is that a lot of the mess that Mr. Loescher had to clean up was a byproduct of a long series of questionable deals that never really delivered on their price or promise. Perhaps, then, Siemens is tempting fate. Or perhaps a good CEO is a good CEO and Mr. Loescher can successfully integrate deals where his predecessors could not, making M&A a sound use of Siemens' prodigious cash resources.

 
Who's on the Menu? 
At this point, all that Siemens has really declared is that they want to spend billions of dollars in the automation and power markets. Accordingly, that opens a wide range of possibilities for investors to consider. Right off the top, though, investors should forget about ABB, GE or Honeywell (NYSE:HON). The first two vastly exceed Siemens' budget and antitrust officials would go berserk. Likewise, Schneider Electric (Nasdaq:SBGSY) seems too large despite some clear synergies. As for Honeywell, that would seem to involve Siemens moving into too many new and unrelated markets to justify the synergies that may there in areas like automation and power.


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http://stocks.investopedia.com/stock-analysis/2011/A-Siemens-Shopping-List-ABB-GE-SI-ETN-EMR-ROK-HON0217.aspx