| While benefiting from strong growth in
its power and rail transport divisions, and despite a
recession-resilient health equipment business, there are signs that a
slowdown is hitting the group's general industrial subsidiaries. The
stock had recovered strongly from its March lows and was sold on
reaching price target. Siemens has a reputation for excellence in engineering, and indeed from an investor's point of view, the company has for too long given the appearance of being run by engineers for engineers. There is now a new management team, and the company is undergoing its first serious restructuring since 1969. The intentions of the management appear to be a "fix and sell" of non-core divisions, and to add to the core, more profitable areas. The seriousness of these intentions has already been demonstrated by the decision to merge its telecommunications equipment division with that of Nokia, thus showing that there are no sacred cows. Management is also reining in unfocused capital expenditure, and there is 21% upside in 2007FY looking at return on equity against price to book, with free cash flow yield forecast to rise to 11% the following year.
| Sedol |
Type |
Price |
Date |
| 5727973 |
Sell
|
EUR 61.093 |
26/08/2009 |
| 5727973 |
Buy |
EUR 67.191 |
13/10/2006 |
| 5727973 |
Buy |
EUR 66.902 |
11/07/2006 |
|
