Follow the world of investing, even superficially, and you'll hear the same names frequently repeated. Nowadays it's nearly impossibly to see a Tesla drive by in traffic and not be reminded of seeing it in a recent headline. Or maybe you're binge-watching a popular new series on Netflix and you're reminded of the results of the company's recent earnings report.
But there are plenty of other stocks of companies that repeatedly touch our lives in a variety of ways, yet are unfamiliar to us -- stocks like Cognex (NASDAQ: CGNX), Crane (NYSE: CR), and Dana (NYSE: DAN).
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Cognex: Set your sights on this machine-vision leader
Cognex may not be a household name, but it certainly impacts our lives in a variety of ways. The company estimates 1 billion products are made each day with the help of its products and solutions. Whether semiconductor manufacturing or tamper-proof food packaging, Cognex's machine vision allows companies from a wide variety of industries to ensure that their products leave the factory as required.
The company has an important role in the COVID-19 crisis, too. According to Cognex, its In-Sight 8402 vision system detects facemask components such as ear bands and strap welds, while measuring the masks to ensure they are the correct size.
Cognex's financials also merit a closer look from investors. The company has a solid balance sheet featuring a net cash position of $400 million as of the end of Q2 2020, and it's adept at generating free cash flow. Over the past three years, the company has reported annual free cash flow of about $204 million, or about 27% of its annual sales on average.
Crane: Money doesn't grow on trees -- it comes from here
Hand over a $5 or $10 bill to a cashier today? Maybe you gave your little one a few dollars to pay for lunch in the cafeteria or stuffed some singles into the piggy bank. Whenever you handle money, you have Crane to thank for it.
The company's roots in providing paper for currency is entwined with the history of the United States: Stephen Crane provided the paper that Paul Revere used to produce banknotes distributed to Colonial troops when the War of Independence began. To this day, Crane provides the U.S. Mint (and more than 50 central banks around the world) with paper replete with security features.
Besides helping to make the money, Crane is involved in how it is spent. The company is a leader in providing solutions for vending machines, including the touchscreen displays and the payment systems. In addition, its currency validation systems are found in multiple markets like gambling, banking, and transportation.
Crane's considerable presence when it comes to cash extends to its financials. In 2019, for example, it reported free cash flow of $325 million, or $4.58 per share. It currently pays an annual dividend per share of $1.72, representing a forward yield of 3.47%.
Dana: What you find when you look over the undercarriage
When you sat behind the wheel recently to drive to work or run some errands, there's a strong likelihood Dana helped you get there and back. The company is a leading provider of powertrain and drivetrain parts, among other components, to various auto markets.
Ford and Fiat Chrysler are two of Dana's largest customers, accounting for 20% and 11%, respective, of the company's sales in 2019. General Motors has sourced car parts from Dana for the past 114 years, and it named Dana as its supplier of the year in 2019 for its driveline technologies. Fiat Chrysler also named Dana a supplier of the year in 2019 for its value optimization. Dana is helping off the highway as well, supplying parts for Oshkosh and Deere, among others.
Although the company suffered from a dwindling top line from 2011 through 2016, it was reversing the trend, growing revenue at a compound annual growth rate of 14% over the past three years. In all likelihood, Dana will see sales drop off in 2020 due to the coronavirus (like so many other companies). Analysts forecast sales of $6.5 billion,though they see the company bouncing back in 2021, estimating sales of $7.7 billion.
What's an investor to do now?
Often, one of the starting points when seeking new investments is to look around and consider companies we rely on every day. While Crane and Dana certainly fit that description, investors should dig deeper before adding them to their portfolios -- especially since they have a track record of underperforming the market. Over the past 10 years, the S&P 500 has soared more than 187%; Crane, on the other hand, has risen only 31%, while shares of Dana have fallen nearly 5%. Cognex, conversely, has skyrocketed more than 981% during this period, and there's reason to believe there's plenty of growth left for the company.
