Vontier Corp. (VNT) is an industrial technology company focused on critical technical equipment, components, software and services for manufacturing, repair and servicing in the mobility infrastructure industry globally, explains Jim Osman, a "spinoff" specialist and editor of The Edge Spinoff Report Lite.

As a leader in automated fuel dispensing machines in the US — investing in electric vehicle charging stations for future growth and having superior margins versus its peers — we believe that Vontier is being mispriced.

Fortive Corp. (FTV), a spinoff from Danaher Corp. (DHR) in July 2016, went on to perform its own separation of VNT on October 9, 2020. At the time of its spinoff, VNT operated as a leader in automated fuel dispensing machines in the US, with an industry-leading EBITDA margin profile of 22.3% compared to the peer average of 15.9% in FY21E.

VNT's stock is down -41% from its listing price and is now trading 26 months since the spinoff (outside the 2-year tax-free mark). Most recently, management hired Anshooman Aga as CFO, succeeding David Naemura.

Looking at Mr. Aga's 20-year experience, he was the CFO of Harsco Corp. (HSC) from August 2021 through August 2022 and also the CFO at Cubic Corp. in 2017. At Cubic, he was instrumental in the sale to Veritas Capital and Evergreen Coast Capital Corp. for $3 billion. Mr. Aga's presence at Vontier could spell a sale might be in the works.

An additional catalyst for VNT is the spate of insider buying in early November 2022, including CFO Mr. Aga (two purchases at $17.50 and $18.50), President/CEO Mark Morelli (bought at $17.42), Chief Legal & Admin Officer Kathryn Rowen (bought at $17.44), and Director Christopher Klein (bought at $18.77).

Recommendation: Considering its undervalued state and potential for a sale (given the new CFO’s track record), we recommend investors buy VNT at current levels to capture potential upside.

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