Sensata Has a Narrow Portfolio for Automotive Electrification

We consider Sensata Technologies to be a distinctive supplier of sensors and electrical protection mainly for the automotive market. The firm has directed itself to capitalize on secular trends towards electrification, efficiency and connectivity. Despite the cyclical nature of the automotive and heavy vehicle markets, electric vehicles and stricter emissions regulations provide Sensata with the opportunity to sell into new sockets, allowing the firm to outpace growth in core vehicle production by around 4% historically. Given the shift in fleet mix towards EVs and our expectations for Sensata’s growing addressable content in high-voltage vehicles, we think this type of superior performance can be achieved within the next 10 years.