Replies to post #384 on Rockwell Automation (ROK)

[Investorman]

If it goes back to its 52 week high in the next year or two you will make 30% on your money while getting a 4% dividend. Pretty safe bet. Lots of value running around out there.

[Investorman]

The Only Two Things You Can Do Wrong
http://www.fool.com/investing/general/2008/05/29/the-only-two-things-you-can-do-wrong.aspx

Todd Wenning
May 29, 2008


In a recent interview with Fortune, Warren Buffett said there are only two things investors can do wrong when buying stocks:

"You can buy the wrong ones, and you can buy or sell them at the wrong time. And the truth is, you never need to sell them, basically." (emphasis added).

Whoa, easy there, Warren
At first glance, it seems that Buffett is recommending that we buy any stock and never sell it, but that can't be true. He did just sell all the shares of Ameriprise (NYSE: AMP) in the Berkshire Hathaway (NYSE: BRK-A) portfolio, after all, which it received as a result of a spin-off of American Express (NYSE: AXP) in 2006.

What Buffett is saying is that investors need to find the right stocks and be patient with them as they grow. In other words: Be an investor, not a trader.

Buffett practices what he preaches. Consider the length and performance of these holdings:

Company
Year of Original
Purchase
Performance*

Washington Post (NYSE: WPO)
1973
12,300%

Coca-Cola (NYSE: KO)
1988
845%

American Express
1993
513%


Source: Berkshire Hathaway annual report. *As of 12/31/2007.

All three are thoroughly beating the S&P 500 over their respective time periods, and you know it had to be hard to stay patient in the rough times. You can be sure that more recent purchases, like General Electric (NYSE: GE) and UPS (NYSE: UPS), were made with a similar long-term perspective.

What this means for us
See, all too frequently individual investors try to outthink the market and capture short-term gains. Unfortunately, that's a flawed strategy for nonprofessionals. For one, we just don't have the time, motivation, or technology to compete with analysts in huge Wall Street firms. Moreover, when you factor in the added costs of taxes and commissions, it's easy to see that when it comes to trading stocks, individual investors have a lot working against us.

On the other hand, as Buffett implies, we do have advantages as investors. For one, we don't have to answer to anyone but ourselves; institutional money managers must constantly justify their holdings to investors. That forces them to think quarterly, and we can easily think in terms of years and decades.

The only thing left, then, is to find the stocks that are worth holding for the long run. For a little guidance on that front, take a page from Fool co-founders Tom and David Gardner, who have successfully spotted a number of good companies for their Motley Fool Stock Advisor service (their stock recommendations are outperforming the market by 42 percentage points since its inception in 2002).

Among other things, they look for stocks that are:

Built to last 100 years or more
Dominating growing industries
Helmed by committed and proven management teams
Governed by the highest corporate values
Increasing shareholder value consistently.
Here's a quick example: One of David's earliest successes was Marvel Entertainment, which he recommended in July 2002 on the heels of the company's success with the first Spider-Man movie. At the time, Marvel was unloved by the market, but was repaying its debt and seemed to be on the way to generating real GAAP profits. The rest, as they say, is history, and Marvel shares have since surged more than 800%.

But Marvel shares didn't follow a steady upward path. There were times when it dropped 20% or more, but that didn't change David's investment thesis. He bought the right stock at the right time and didn't sell.

[Investorman]

"A jug fills drop by drop."

-- Buddha

While many chase runaway investments that will make them spectacularly rich in short order, it's telling that one of the best companies to own over the last several decades -- Berkshire Hathaway (NYSE: BRK-B) -- has compounded its book value per-share at 21.1% per year since 1965. That's an astonishing performance, of course, but it happened slowly enough to cause those looking for instant success to dig elsewhere. While quick multibaggers can be appealing, massive fortunes are more often awarded to those patient enough to let the magic compounding strut its stuff over time.

[Investorman]

Rockwell Auto sees European growth accelerating
Tue Jun 3, 2008 11:07am EDT

BOSTON, June 3 (Reuters) - Rockwell Automation Inc (ROK.N: Quote, Profile, Research), which sells systems to help factories run more smoothly, expects sales growth in Europe to accelerate in the second half of its fiscal year, Chief Executive Keith Nosbusch said on Tuesday.

"In Europe last quarter, we had 2 percent organic growth and 10 percent acquisition growth, and we had targeted (organic) growth to be around 10 percent," Nosbusch said. "Going forward in the second half of the year, we believe we will get closer to that 10 percent number. The reason why is that we know some of our customers will have stronger buying in the second half of the year."

In comments to investors that were monitored over the Internet, Nosbusch said the Milwaukee-based company had added European salespeople whom it believed were becoming more productive in the second half.

Analysts expect Rockwell's earnings per share to increase 15 percent to $4.29 in the fiscal year ending in September, according to Reuters Estimates.

Rockwell shares were down 32 cents at $56.73 on the New York Stock Exchange. So far this year, they have fallen 18 percent, deeper than the 7.5 percent drop in the Standard & Poor's capital goods industry group index . (Reporting by Scott Malone; Editing by Lisa Von Ahn)

[Investorman]

Rockwell Automation Highlights Benefits of Sustainable Production in Third Annual Corporate Responsibility Report


Company Reports Reduced Energy Usage and Solid Waste Generation in 2007

MILWAUKEE--(BUSINESS WIRE)--June 9, 2008--Rockwell Automation (NYSE:ROK) today announced its 2007 Corporate Responsibility Report is now available. Titled Growing Responsibly, the report reviews how Rockwell Automation's products and services help customers meet their sustainability objectives. Additionally the report provides metrics on Rockwell Automation's own performance, which included reducing electricity, liquid fuel and natural gas usage; direct and indirect carbon emissions; and solid waste generation.

"Rockwell Automation is focused on growth. It's more than just an eye on our revenues and profit margins. We know our growth - our sustainability as a company - depends on the growth of our customers, employees and communities," said Keith D. Nosbusch, Rockwell Automation chairman and CEO. "Some call it responsibility. Others call it sustainability. The core value is the same. For us, growing responsibly is doing what's right not only for business performance, but also for our customers, employees, communities, shareholders and the world around us."

Nosbusch believes responsibility adds to the bottom line. Many Rockwell Automation customers have adopted sustainability goals. The company supports these efforts with products and solutions to help make factories safer, more energy efficient and cleaner, which benefits surrounding communities as well.

Rockwell Automation helps customers:
Reduce energy consumption, minimize waste and decrease environmental impact, while providing new energy sources for the future, all without impeding growth


Track and trace the materials that go into their plants and the products that come out to help ensure product quality and safety


Access information needed to monitor, optimize, control and report issues in an increasingly regulated environment


Increase employee and equipment safety
"Sustainable production helps our customers achieve business goals that have always been a priority - use equipment and systems as efficiently as possible, increase productivity, reduce costs and quickly respond to customers," commented Nosbusch. "Throughout our history, every time customers have faced new business and manufacturing opportunities, we have been there to help them find solutions. We view sustainability - growing responsibly - as another one of those opportunities to innovate for customer success."

Company's Environmental and Workplace Safety Performance Continues Positive Trend

As Rockwell Automation has evolved from a U.S.-based hardware business to a global technology company, it's become more of a "light manufacturer." Even though the company has experienced significant growth, it has held steady or reduced its environmental impact. From 2006 to 2007, the company reduced electricity usage by 14 percent and used 7 percent less liquid fuels and natural gas. In addition, Rockwell Automation:

Reduced indirect and direct carbon dioxide emissions resulting from energy consumption by 14 percent normalized to total sales


Reduced solid waste generation by 43 percent normalized to total sales


Recycled or reclaimed 80 percent of solid waste generated
Other highlights from Rockwell Automation's Corporate Responsibility Report include:

Achieved all three worldwide safety goals for second consecutive year


Recordable case rate: 1.07 recordable cases per 100 employees

Lost work day case rate: 0.24 lost work day cases per 100 employees

Lost work day rate: 4.7 per 100 employees


Increased U.S. minority supplier spend from $8 million in 2004 to nearly $43.6 million in 2007


Introduced a Supplier Code of Conduct to first-tier suppliers


Charitable Corporation, combined with other company funds and efforts, contributed $6.5 million in cash and in-kind donations worldwide


Governance Metrics International rating was a 10 out of a possible 10, as of August 31, 2007


Institutional Shareholder Services Corporate Governance Quotient as of January 18, 2008 was an Index Ranking of 74.3 and Industry Ranking of 96.8


Awards and new memberships: FTSE 4 Good Index of companies, U.S. EPA SmartWay Transport(R) Partnership, Wisconsin Green Tier program, and British Safety Council International Safety Award
Rockwell Automation's Corporate Responsibility is available online at http://www.rockwellautomation.com/about_us/responsibility.html. To order printed copies, please e-mail [e-mail].

Rockwell Automation, Inc. (NYSE: ROK), is a leading global provider of industrial automation power, control and information systems and services that help manufacturers achieve a competitive advantage in their businesses. The company brings together leading brands in industrial automation, including Allen-Bradley controls and services and Rockwell Software factory management software. Headquartered in Milwaukee, Wis., the company employs about 20,000 people serving customers in more than 80 countries.

[Investorman]

Rockwell Automation Recognized As ''One of World's Most Ethical Companies'' by Ethisphere Institute
Monday June 9, 12:40 pm ET


MILWAUKEE--(BUSINESS WIRE)--Rockwell Automation is recognized as “one of the world’s most ethical companies” by the Ethisphere Institute, a think tank that studies business ethics and corporate responsibility. The selection process included reviewing the ethical and legal performance of more than 10,000 leading companies from which 93 were selected as winners by the Ethisphere Institute. Doug Hagerman, Rockwell Automation senior vice president, general counsel and secretary, accepted the award at a joint conference, Driving Profit through Ethical Leadership, sponsored by Ethisphere and Forbes, in New York on June 3.
Source: Rockwell Automation, Inc.


“This award belongs to the 20,000-plus Rockwell Automation employees around the world who do the right thing every day,” said Keith Nosbusch, Rockwell Automation chairman and CEO. “We all contribute to this company’s strong record of corporate citizenship.”

Rockwell Automation was evaluated on seven categories: corporate citizenship and responsibility, corporate governance, innovation that contributes to public well being, industry leadership, executive leadership, integrity track record and reputation, and internal systems and ethics.

“Rockwell Automation is commended for developing impressive and meaningful ethical business practices that distinguish them in their industry,” said Alexander Brigham, executive director of Ethisphere Institute. “They embody the principle that ethical business practices are more profitable in the long run and serve the corporation’s best interests.”

“We’re proud to be recognized as a global leader in ethics, sustainability and corporate responsibility,” said Hagerman. “This award reflects that our company is performing at a high level on all aspects of the triple bottom line: economic prosperity, environmental stewardship and social responsibility.”

[Investorman]

Rockwell Automation Inc. (ROK:Rockwell International Corporation
10:34am 06/25/2008

ROK 46.57, -5.62, -10.8%) warned it no longer expects to reach its 2008 earnings target because of slower-than-expected growth in the U.S. and Europe. It now sees third-quarter earnings in the range of 93 cents to $1 a share. Analysts expected, on average, quarterly earnings of $1.13 a share.

[Investorman]

Rockwell Automation Provides Third Quarter Guidance

MILWAUKEE--(BUSINESS WIRE)--June 25, 2008--Rockwell Automation, Inc. (NYSE: ROK) today announced that it expects to report third quarter diluted earnings per share of $0.93 - $1.00. Given the expected third quarter earnings, and what appear to be less favorable market conditions in the U.S. and Europe, the Company no longer believes that full year EPS will fall within the previous annual guidance range of $4.25 - $4.45.

Fiscal 2008 third quarter revenue excluding currency translation is expected to be approximately 7 - 9 percent higher than the third quarter of fiscal 2007, with foreign currency translation anticipated to add an additional 5 percentage points.

Revenue for the month of April was consistent with original expectations. However, for the past several weeks, the Company has experienced slower than expected growth in the U.S. and Europe, primarily in its product businesses. The third quarter organic growth rates in the U.S. and Europe are expected to be in the low single digits versus the year ago period. Consistent with expectations, the Company has continued to experience strong growth in Asia Pacific and Latin America.

In the third quarter, the Company has seen continued strong revenue growth in its solutions and services businesses within the Control Products & Solutions segment. However, in the higher-margin Architecture & Software segment, the expected revenue growth has not occurred.

The Company is currently evaluating the market outlook for the balance of the year along with appropriate cost control actions and will comment further during the third quarter earnings call.

Keith D. Nosbusch, chairman and chief executive officer, said, I continue to have confidence in the long-term growth prospects for this business. It appears that market growth is slowing in two key regions and we will deal with that reality. We remain committed to delivering appropriate profitability while preserving our investments in future growth opportunities and maintaining our technology leadership.