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Here's How Much You'd Have If You Invested $1000 in Rockwell Automation a Decade Ago

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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in Rockwell Automation (ROK - Free Report) ten years ago? It may not have been easy to hold on to ROK for all that time, but if you did, how much would your investment be worth today?

Rockwell Automation's Business In-Depth

With that in mind, let's take a look at Rockwell Automation's main business drivers.

Based in Milwaukee, WI, Rockwell Automation provides industrial automation and information solutions worldwide. The company has a wide network spanning more than 100 countries. The United States generates around 50% of the company’s total sales. Outside the United States, the company’s primary markets are China, Canada, Mexico, Italy, the U.K., Germany, and Australia.

The company operates manufacturing facilities in the United States and multiple other countries. Manufacturing space occupied approximately 2.8 million square feet, of which 38% is in North America. Its brands include Rockwell Automation, Allen-Bradley and Rockwell Software.

Effective first-quarter fiscal 2021, Rockwell Automation started reporting results based on three operating segments: Intelligent Devices, Software & Control, and Lifecycle Services. This change simplifies its structure around essential offerings, leverages its sharpened industry focus, and recognizes the growing importance of software in delivering value to customers.

Major markets served by the company consist of discrete end markets (Automotive, Semiconductor, and General Industries), which contributed around 25% of the company’s first-quarter fiscal 2021 sales. Hybrid end markets including Food & Beverage, Life Sciences and Household and Personal Care, among others contributed around 45% to the company’s sales in first-quarter fiscal 2021, while process end markets such as Oil & Gas, Metals, Chemicals, Pulp & Paper, to name a few, generated 30% of the company’s sales in first-quarter fiscal 2021.

Intelligent Devices (48% of revenues in second-quarter fiscal 2021), segment includes drives, motion, safety, sensing, industrial components, and configured-to-order products.

Software & Control (28% of revenues in second-quarter fiscal 2021), includes control and visualization software and hardware, information software, and network and security infrastructure.

Lifecycle Services (24% of revenues in second-quarter fiscal 2021) includes consulting, professional services and solutions, connected services, and maintenance services, and the Sensia joint venture.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Rockwell Automation a decade ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in June 2011 would be worth $3,635.49, or a gain of 263.55%, as of June 14, 2021, and this return excludes dividends but includes price increases.

Compare this to the S&P 500's rally of 234.19% and gold's return of 18.21% over the same time frame.

Looking ahead, analysts are expecting more upside for ROK.

Backed by recent robust order levels that indicate improving trends in its end markets, Rockwell Automation hiked fiscal 2021 earnings per share guidance to the band of 8.95-$9.35. The bottom line will gain from its focus on process improvement, material cost savings and improving productivity. However, margins in the second half of the fiscal will impacted by timing of core spend, along with one-time incremental software and sustainability investments announced in January. The company is expecting sales of about $7.0 billion in fiscal 2021. Reported sales growth is anticipated in the range of 9% to 12%. Acquisitions to expand global presence, augment its information solutions and high-value services offerings and capabilities will aid growth. However, weakness in the oil and gas industry and supply chain constraints remain concerns.

Over the past four weeks, shares have rallied 6.24%, and there have been 10 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.

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