OMRNF - Keyence: Opaque Expensive And Excellent
2024-07-10 06:19:28 ET
Summary
- Keyence is a remarkable company with low double-digit revenue growth and mid-teens free cash flow growth over the past decade and major positions in key automation and automation-enabling markets.
- Revenue has slowed with weaker end-market demand in markets like autos and machine tools, but electronics and semiconductor markets are picking up; margins have been compromised by significant hiring.
- Keyence remains a growth leader in automation with a focus on product development and customer service; Keyence's strength in areas like measurement, sensing, and control are invaluable.
- There are no metrics by which Keyence looks conventionally cheap, but it has a very different structure and is likely to continue leveraging global automation demand growth.
Japan’s Keyence ( OTCPK:KYCCF ) (6861.T) is a remarkable company in many respects. This leader in automation and automation-enabling technologies has generated low double-digit revenue growth and mid-teens free cash flow growth over the past decade, producing incredible margins while also reinvesting in the business and continuing to innovate. It is also one of the most opaque, difficult-to-follow companies out there, and if you don’t read Japanese, I think it will be a struggle to keep up with quarterly results....
Keyence: Opaque, Expensive, And Excellent