Opinions
Gavin Graham
ABB Ltd.
ABB-N
BUY
Oct 23, 2015
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.
This used to be regarded as a great play on infrastructure investment in the emerging world. It got hit very badly in the financial crisis. Longer-term it hasn’t done a great deal, which is a little bit surprising given its involvement with things like power infrastructure and civil engineering. Probably not a bad time to be picking it up if you believe, as he does, of higher growth in China and the emerging markets and the central banks remaining on Hold.