Rockwell Automation Inc. (ROK)

The industrial group as a whole is under pressure. ROK broke its 200 day moving average at $305 and he is stepping away. The only industrial stocks are defense companies.

They make equipment and software that lets companies automate their automation and saves labour costs. Buy on weakness. It's been hammered in this sell off, down 20% from its peak. They reported yesterday: an earnings beat, 17% organic growth, beating 13%, and maintained the full-year forecast. Of the latter, the street saw that as weakness and sold shares hard. He views that as cautious and smart.

Automation wins in a recovering economy and a very tight labour market. Rockwell's hardware and software helps industrial companies to automate and become more efficient. He's recommended this for the past year. They reported a mixed quarter last week: weaker sales thatn expected and a big earnings beat, though they forecast 14-17% organic growth while the street expects 7%. It hit an all-time high last week. At their investor day today they outlined a plan to raise sales from $7 billion last year to $9 billion in the near future.

Global factory automation specialist and specialize in streamlining manufacturing operations. Companies are cash rich but don’t want to sign up in long-term deals with employees. This company helps them become more efficient. Companies are trying to compete with Asia where there is lower cost labour.

(A Top Pick Aug 31/05. Up 8.5%.) Still likes and could see holding the stock for a good long while.

They retool plants to make them more automated through software, robotics, etc. Earnings growth is phenominal. Not that expensive. Good management.