I’ve accumulated a bunch of stuff. Won’t have a bunch of posts for the next 10 days or so, but check back once in a while or check your RSS reader. By the way–subscribe to the comments as well as the main feed. Sometimes they get interesting.
I’m not sure how many people receive Jim Pinto’s newsletter, but I’ll put in my analysis for those who do. I guess Jim attended an analyst meeting regarding automation companies recently. One of the analysts (I wonder how they get hired sometimes) heard GE’s CEO Jeff Immelt say that he was interested in acquiring industrial companies and suggested that perhaps Immelt meant Rockwell Automation. Pinto thought that was good, partly because he thinks Rockwell needs to be purchased and partly because GE would give it broader distribution in China.
I (non-analyst that I am) believe that when Immelt said industrial that he was talking about companies that make things that would also fit within the GE portfolio. The hot areas right now involve power and energy plus medical devices. GE has significant investments in manufacturing in those arenas, and I would expect to see some acquisitions to expand its reach there. GE would be looking for acquisitions poised for growth. Specifically, I’d expect more in wind turbines and the electric grid.
Now if I knew everything I’d be rich, then I’d be like Jim and writing for fun instead of trying to make a living (wait a minute, this blog is for fun, oh well). But a $5 billion automation company may not be the best play right now. Plus the stock has rallied since March more than doubling its worth. The window for purchase was last spring. By the way, Pinto also cites an uptick of RA stock since the meeting. But it’s been growing for eight months now. By the way, as has ABB’s and Emerson’s.
And, oh yes, GE has an automation company–GE Intelligent Platforms–that supplies much of the parent’s automation needs. As for distribution–automation distribution is a far cry from turbine and appliance distribution.
Usually Jim and I agree, but we don’t on Rockwell. I follow more the ideas of an investment banker whom I recently talked with who admires Rockwell for its sound cash management policies. It’s not a buy and flip stock where you try to make big bucks on growth. It’s more of a conservative buy and take the dividends. (Disclosure: If I have any ROK, it’s buried somewhere deep in the funds I have. I don’t trade in automation stocks. And I definitely don’t advise people, even me, on stocks.)
I see that Invensys Operations Management is still coming together, but it’s getting there. A new Website has popped up I guess I’d go with the majority of people I’ve talked with outside the company–the new logo doesn’t do anything for me. But the new site brings together all the disparate parts that they are trying to merge.
I talk often about standards in automation. The last 18 months or more have seen more than its share of discussion about wireless standard development — WirelessHart and ISA100 especially. I think standards help an industry move forward, because people can start to develop products or write code around them and users gain some assurance that the technology will stay around a little while and applications will interoperate. On the other hand, I always saw the wisdom of Ken Spenser who was at the time CEO of Think&Do software–“The best standards are de facto standards.” Here is a blog post by Dave Winer on the subject. He is concerned with the “high tech” world, but the ideas are applicable here. What do you think?
Volkswagen the new GM?
Here’s a post by Bill Waddell over at Emerging Excellence analyzing recent moves of Volkswagen. I agree with much of what he says. But I’d add a question — can companies become so large and complex that they simply can’t be managed any longer and must be pruned in order to prepare for new growth?