Industrial Automation Stocks Continue to Slide

Rumors buzz...

Industrial sector "unloved"

Extracts from eNews dated July 3, 2000

Industrial Automation Stocks Slide - Rumors Buzz

Industrial automation stock continued to take a beating this past week. You'll find lots of interesting information, with graphs, charts, facts and figures on the web. Take a look for yourself on the Yahoo Financial news website: Click

Honeywell Down, Emerson Up

Honeywell slid to $33 near its 52-week low of 32. A long-term Honeyweller, now ex, sent me this:

    "I have an unconfirmed rumor that P+F just bought the entire industrial proximity line from Honeywell Sensing and Control (a.k.a. Micro Switch). If this is true, it might be the preliminary signal that Honeywell is positioning itself to get out of the industrial control market and that the photoelectric line is probably next to go. I don't know if the "cash cow" industrial limit switch will be going but I do know that GE ED&C was private labeling that product and may be willing to take it over."

Emerson climbed 5% during the week and closed just above 60. Some people brought up rumors about Siemens making a bid for Emerson, which my high-within-Emerson source tells me (and I believe) is "Horse manure of the finest vintage".

Rockwell slides - how much further?

Rockwell slid to a 52-week low of $31 (ouch#&%@! I bought the stock at 38.00).

A Rockwell “deep throat” commented :

    "I keep hearing that Rockwell is doing better than last year but behind plan. They are laying off people, cutting expenses, stopping travel and training. Sounds like a short term tactic to boost the stock price or even clean up prior to being acquired. And meanwhile, Don Davis (the CEO) continues to collect his almost $3m salary…"

An ex-Allen-Bradley executive commented on my suggestion (eNews June 26, 2000) that Eaton and Rockwell should get together.

    "Eaton and Rockwell could never get together, unless Eaton was the surviving management team, here's why:
    • 1. Don Davis fired Randy Carson, who now heads Cutler-Hammer as the automation brains of Eaton
    • 2. Rockwell sold off all the automotive stuff a.k.a Meritor
    • 3. Rockwell is too arrogant."

Regarding my eNews story on the Rockwell/Omron alliance (eNews May 10, 2000) an Allen-Bradley insider emailed me :
    "It seems that the recent Omron/Rockwell news will apparently lead to merger or acquisition, but slowly and in 'stealth mode'..."

Industrial Automation "Unloved"

Regarding the stock-market slide, Mathieu van den Bergh writes :

    "I hope that the market will soon recognize that our old brick and mortar industries are undervalued. If we look at the market valuation of companies like Siemens, one wonders about Wall Street (in)sanity. I guess, we will need to experience a slight economic downturn, with the "dot-com companies" going out of business by the bunch before common sense sets back in".

Andrew Bond, editor of UK-based "SCADA Insider" brought this interesting item to my attention :

    "Roxboro (Solartron, Mobrey etc) are in negotiation with a VC to take the group private. Part of the explanation is that Roxboro is 'in an unloved sector'. The deal would value Roxboro at 210m UK pounds (17.9m UK pounds profit on 124.8m UK pounds sales in 1999). One for the revised urge to merge list before it goes unlisted!"

See my more extended coverage and commentary on this story
Click Roxboro - UK News and Commentary

Andrew continues, to echo Mathieu's point :

    "Interesting to speculate that automation companies are unable to take advantage of the dot-com effect when technology stocks rise but appear to suffer from it when they fall!"

My article gives you the background on these goings-on :

Changing Face of Automation "The Changing Face of Automation"

My previous tome includes sales vs. market-cap for all the industrial automation leaders :

The Urge to Merge Urge to Merge

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