I've owned ABB for several years and would like to reiterate some points in it's merit considering the last 3 months where the stock plunged 25%..
ABB provides power and automation technologies to utility and industry customers worldwide. In simple terms these guys build huge turbines and power plants. If Toyota is building a new Robotic plant - ABB will build the robots.
Despite the recent decline It's all good news with ABB as far as I'm concerned. Even though stock value has dropped, ABB is still 10% up in the last troubled year.
ABB's 26% quarterly revenue growth combined with a 33% earnings growth is right where it should be to support future stock value growth. P/E is at 13 - fair enough for this industry.
On the macro level ABB remains best positioned to enjoy business opportunities in China and India. ABB has got only one serious competitor - GE. My opinion of GE is known, I think the company is a mess where as ABB are run like a swiss clock.
Being a Swiss company is especially great for American investors who get a dollar hedge in this position as well.
I think ABB is getting beaten up by the general sentiment that raw material, energy and those who facilitate their use (companies like ABB) have had a run way too long, but ABB doesn't really have anything to do with that. ABB has contracts locked down years in advance and their relation to the sector shouldn't be confused with their business core - serving infrastructure, which will continue it's rapid growth in developing countries.
My favorite stat for ABB is it's return on equity - 38.5% - not to shabby for a 55 billion cap with 115,000 employees.
This means ABB isn't borrowing and is using working capital to grow into new contracts (GE's ROE is half of ABB's). I think return on equity is one of the key ratios to look at these days for any company.
That's my 2 cents, I'll be holding this one for a while.
I would love to hear what my technical friends have to say about the chart..
http://www.marketguru.com/opinions/abb-revisited/1002,1177
