Obermatt Coffee break Zoom chats always bring us interesting investment ideas: April 6th was Mikron - a Swiss machining and automation company we discussed buying for our Swiss Value Wikifolio. Here’s why.
PRO: The following three points speak for a buy:
- Very good Obermatt ranks: Value is at 90, making this company’s shares cheaper than 90% of its European competitors’. Our new 360° View is at 82, which makes us believe that Mikron’s overall performance is great.
- An interesting array of industries Mikron provides its solutions to: Automotive, construction, agriculture, consumer goods and even pharma/medical, among others. When a company has such a broad portfolio of products that so many industries depend on, it is a safer option.
- The recently added production capacity helps the company's growth.
CONTRA: The following three points argue against it:
- A bad Opinion Change rank of only 1. This means that the analysts covering the company have recently lowered their predictions.
- Mikron is medium sized according to the Obermatt size classification and we usually buy larger companies for our portfolios.
- Even though mechanics are constantly improving, companies rarely replace entire production lines and big machines, so Mikron’s orders backlog may not always be long which may cause sales performance fluctuations, especially as it’s a smaller company. On the other hand, spare parts and maintenance are what keeps the company in maintaining its profits.
In our opinion, Mikron is a good investment opportunity, especially at its current share price. Taking into account all the pros and cons, we have decided to include it in our Swiss Value Wikifolio, which you can invest into yourself. Also, make sure to join our free Coffee Break chats and help us shape our Wikifolios, learn more on stock investing from our experienced guests and enjoy a productive and insightful break from work.