Some very good points brought up on (1) how these large durable companies (like EMR & Honeywell) can maintain & build their intellectual property (ie investments in new technology), grow revenues & earnings, w/o being left in the dust w/ legacy solutions.
OneSoft would be an excellent acquisition candidate for EMR to expand their industrial business (specifically Oil/Gas customers) if had at the right price.
OneSoft has a more unique plan. They are the only co. in the world that offers A.I. cloud predictive analyses for oil and gas pipeline faults
This was announced Wednesday May 20, 2020
Emerson investing $100M in innovation, manufacturing
The nearly 180,000-square-foot expansion in Boulder, Colorado includes a new, 85,000-square-foot laboratory and manufacturing facility to design and develop products, technologies and software that measure and control the flow of material in a manufacturing process.
"Our new facility demonstrates our continued commitment to customer-driven innovation and high-tech manufacturing, as well as our focus on attracting the best and brightest talent to work for Emerson ( EMR +1.9%)," said CEO David Farr.
FWIW, my niece just obtained her MBA from MIT (business development w/ focus on AI manufacturing) and will be working in Denver for a consulting firm to help US manufactures gear up for this new 'smart' manufacturing revolution. I will have to ask if she knows about EMR's new facility in Boulder.
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Many High Tech companies generate No Profits/Earnings and even burn cash to achieve growth. As a Fundamental Value investor, I like the idea of generating profits, making investments in new products/technologies, creating a large expanding customer base (durable moat) by providing products and services customized to specific needs (industrial manufacturing) and being rewarded w/ higher margins and recurring service revenues.
It's a tough combination but Honeywell, Lockheed, and other large Fortune 500 companies have achieved this balance. GE used to deliver such results but went into the insurance area that cratered the company.
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For the investor that creates a portfolio of stocks, perhaps a basket of companies w/ an anchor like EMR could achieve the growth/gains that very small start-up provide but have a core holding revenue/income generator that EMR delivers. Maybe EMR's management is doing this w/ their $100M 'innovation' investment and there is no need for the individual portfolio investor to search out these innovators.
FWIW picked up another 20 shares of EMR at $55.80/share w/ more Buys every 1% lower until I can build a core position. I want to have a larger exposure to Industrial Manufacturing High Tech companies to capture what I think is the next wave of smart/robotic US manufactures.
More food for thought
EKS |
