Opinions
Darren Sissons
ABB Ltd.
ABB-N
HOLD
Oct 09, 2014
Stock price when the opinion was issued
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We have heard for so long that infrastructure spending will pick up, and this company in particular has been one of those companies that should be a beneficiary as they are involved in distribution and transmission. It has disappointed for a long time because the expectation just hasn’t been realized. Expects this scenario will continue longer than people realize. While a very good company, he is not sure there is going to be any growth in earnings or sales.
The 2nd largest manufacturer of industrial robots. The stock has done really, really well on the expectation of Europe starting to recover and the US is improving. There is better outlook for industrial robots. The company reports in Swiss francs and raises its dividend, but because of the strength of the US$ investor, we have not seen those gains. At these levels, he thinks this is quite rich.
Doesn’t think this one is timely. When looking back when earnings grow beyond what people expect, it is usually in a cycle where there is tremendous investment going into the high voltage electrical grid. When copper prices and electrical steel prices move up in tandem with a good demand environment in the energy sector, that is exactly when you have pricing power for transformers. He doesn’t see any of those conditions today.
Swedish conglomerate in the electrical space, which plays into AI and data centres. Because Sweden is such a small country, they have to export around the world and maintain those international relationships. So far, US tariff talk has been centred on North America. Europe, so far, has been left unscathed, which bodes well for a company like this.
Doesn't own, but you could be very comfortable adding it to a portfolio for the long term.
Out of Zurich. Four business units: electrification motion, process automation, robotics, discrete automation. Hardware. Builds autonomous mobile robots, mainly on the industrial side. Reported last Friday; did tremendously well and raised guidance. Yield is 1.93%.
(Analysts’ price target is $55.92)
This has been a very interesting story in the last couple of years. Went down to around $15 and then back up. Has now fallen back down from the $25 range. A couple of things have caused this. There was a cyclical recovery in Europe and that was a big uptick and it got to a point where expectations were a little overblown. The recent fall has been because of sanctions to Russia and delayed big projects around the world. The major challenge is that they had major project in an offshore wind farm that blew up on them and they have to take some special one-time charges. That will probably all be done by the end of the year. They have more cash than debt. A big cash generator engine. 4.5% dividend.