STX - Nidec: Building An Electrifying Growth Story

• Nidec surpassed fiscal first quarter estimates by a healthy margin, despite supply headwinds in two of its key businesses (small precision motors and autos).
• The opportunity in motors for electric cars remains very appealing, but the opportunity to sell motors for smaller electrified vehicles like e-bikes shouldn't be ignored.
• Transitioning away from HDD motors will likely limit some operating leverage in the near term, but embracing growth markets like robotics makes sense for the long term.
• Nidec is not conventionally cheap, and my expectations of mid-teens growth are not conservative, but leadership in a wide range of electric motors could drive the business to a new level by 2030.

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