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Is Cognex Corporation (CGNX) an Inflation Proof Stock?

Investment management company RGA Investment Advisors recently released its fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. 2022 was a difficult year for the market and forecasting business trends and opportunities were challenging. The firm focuses on growing companies, at reasonable valuations with demonstrable business quality. The firm also believes that Biotech and life science tools and instruments verticals are the most interesting areas for better future returns. You can check the top 5 holdings of the fund to know its best picks in 2022.

RGA Investment Advisors highlighted stocks Cognex Corporation (NASDAQ:CGNX) in the fourth quarter investor letter. Headquartered in Natick, Massachusetts, Cognex Corporation (NASDAQ:CGNX) provides machine vision products. On February 3, 2023, Cognex Corporation (NASDAQ:CGNX) stock closed at $55.90 per share. One-month return of Cognex Corporation (NASDAQ:CGNX) was 7.44%, and its shares lost 13.69% of their value over the last 52 weeks. Cognex Corporation (NASDAQ:CGNX) has a market capitalization of $9.667 billion.

RGA Investment Advisors made the following comment about Cognex Corporation (NASDAQ:CGNX) in its Q4 2022 investor letter:

“This question as to whether anything has structurally changed is as applicable to e-commerce as it is to 2022’s most talked about economic datapoint: the CPI. Before the pandemic, people would speak about “secular stagnation” and the strong disinflationary forces that kept the economy from experiencing a robust post-Great Financial Crisis recovery. Today, we are far more likely to hear about stagflation than “secular stagnation”, yet the economy is growing faster today than it was in the past. We must therefore ask ourselves, what are the biggest changes from before the pandemic to now that would change our economic outlook from disinflation to inflation. The largest change is what people now call “The Great Resignation” whereby Boomers who entered the workforce in the 1970s finally retiring en masse.[3] This can have consequences for wages, though we would caution against fearing a wage price spiral as underinvestment in efficiency due to an overabundance of labor during the past decade can finally commence with lower levels of fear for labor unions and politicians alike. In fact, investments in productivity might even be encouraged now with fears of inflation front-and-center. As we have pointed out several times in the past, Cognex Corporation (NASDAQ:CGNX) stands to benefit considerably from this change.”

Cognex Corporation (NASDAQ:CGNX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Cognex Corporation (NASDAQ:CGNX) at the end of the third quarter, which was 29 in the previous quarter.

We discussed Cognex Corporation (NASDAQ:CGNX) in another article and shared the list of best small cap AI stocks to invest in. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.