LECO - After A Sharp Drop IPG Photonics Is Worth Another Look

• IPG Photonics got hit hard on disappointing second quarter results and weak third quarter guidance, but the shares had been underperforming the larger industrial group on a year-to-date basis.
• Management attributed the lower guidance to temporary issues, but considering data from competitors and comparables, it's worth asking whether local Chinese rivals are gaining more share.
• Innovation is still a significant priority at IPG, and Chinese rivals are still well behind for the most demanding applications, with IPG still seeing attractive opportunities in multiple growth areas.
• High-single-digit revenue growth and mid-teens FCF growth can drive a relatively attractive total return from here.

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