SIEGY - Siemens' Ongoing Underperformance Is Curiouser And Curiouser

• Siemens had a fine quarter by the standards of multi-industrials, including strong order growth, but the performance was less impressive when compared to others in the automation and electrical sectors.
• Siemens has good leverage to attractive long-term secular growth stories like automation, digitalization, and electrification, but there are some valid questions as to whether it has the leading portfolios.
• Weak margins and returns (ROIC, ROA, ROTA, et al) are a valid concern, as these metrics typically correlate strongly to forward multiples, but Siemens' future cash flow generation looks better.
• I do see real challenges to Siemens across many of its core markets, but I believe Siemens will nevertheless do well and today's valuation looks too pessimistic.

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