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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (44656)	9/28/2011 10:25:40 PM
From: E_K_S	Read Replies (1) \| Respond to of 78680

Hi Sergio ABB and the Swiss franc - When I saw they were a Swiss company, I immediately felt that this was a positive (because of the strength of the franc) when looking at all the potential problems one might have with a Euro denominated currency. However, in the long run, it's more of a factor that their European customers make current payments on their long term contracts and are not forced to spread out their projects over a longer period because of financial problems. In 2008-2009 "crash" we saw orders get postponed or lengthened and a few of the larger deals were in question because of financing concerns. Banks pulled credit lines and/or froze lines of credit for projects which essentially stopped work on everything until bank credit was re-established. I doubt this would happen especially for non European orders. I suspect because of their size and global sales, they must have some sort of local currency hedge for their bigger deals in Asia, Brazil, US and Europe. I would not be too concerned about currency gains/losses but rather their order book and the growth in new orders given the future outlook of economic growth. They do have a lot of business in China which to me is a positive. They also have a lot work in Japan because of the recent earthquake and Izanami damage to their power grid. The risk/reward opportunity is looking positive to me if the stock can be picked up at a bargain price. Other than having to eat (ie food), Japan and China need an efficient power infrastructure to maintain their economic growth. ABB is one of only a few companies in the world that can provide the needed services. EKS