By: Scott Davis
- ROK is a prime beneficiary of secular tailwinds around automation, including labor challenges, rising protectionism driving more localized supply chains, and falling costs of technology
- Only remaining globally-scaled pure-play automation player; scarcity value that has helped sustain a premium stock valuation. ROK would also be highly attractive to strategics (see EMR bid in late 2017), which helps put a floor on valuation.
- Pushback (aside from valuation) is a history of deep cyclicality, and only peer-average organic growth rates
- “New” CEO Blake Moret has proven more willing to partner with other companies (e.g. PTC, SLB) to fill in for ROK’s gaps. Though financial impact remains to be seen.