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LivestreamMenuA new position in my portfolio is Timken , a little-known 125-year-old maker of industrial bearings that is now an under-the-radar play on the booming automation and robotics market. The robotics market is catching an artificial intelligence tailwind that will take it to from $100 billion in revenue in 2025 to $2.5 trillion by 2035, according to JPMorgan. Why I’m buying A less obvious link in the AI food chain The core business of North Canton, Ohio-based Timken is engineered bearings, which reduce friction between moving parts, along with a growing industrial-motion business that makes technology to control movement. Think: a robotic arm on a factory floor, an automated warehouse robot moving products, a wind turbine, or an airplane’s landing wheels. Timken makes some of the less visible components that enable those systems to move. And now with the potential of AI at the controls of these machines without human intervention, these markets are set to grow exponentially, increasing demand for Timken. In 2025, Timken generated $4.6 billion in sales, roughly two-thirds from Engineered Bearings and one-third from Industrial Motion, and operates in 45 countries. Timken, which sports an $8.7 billion market value, plans to direct more than 80% of its incremental capital and resources toward strategic markets including automation and robotics, power generation, aerospace and defense, and infrastructure. A new CEO is reshaping the business What really makes the stock compelling to me is the combination of growth and restructuring. Finding that one-two punch is one of my favorite ways to invest. Timken’s new CEO Lucian Boldea took over in September 2025, after more than 25 years in manufacturing, most recently leading Honeywell’s $10 billion-plus industrial automation business. In May, he launched Elevate to Outperform, a three-part plan to reshape Timken’s portfolio, accelerate growth in its priority markets and get more out of its global operations. We’re already seeing some of those changes. Timken is divesting its Belts business, a move expected to boost Industrial Motion margins by more than 200 basis points. (1 basis point equals 0.01%.) And recently, it acquired automated-lubrication company Bijur Delimon, expanding its presence in key growth markets including rail, power generation and mining. And while the company is under new leadership, expect its rock solid dividend track record to continue. Timken has more than 100 years of paying quarterly dividends and 13 straight years of increases. New targets give the stock real earnings upside The company unveiled at an investor day in May that management is targeting adjusted EPS of about $8.50 by 2028, up more than 55% from $5.33 in 2025. It also expects sales to reach $5 billion to $5.2 billion, up from $4.6 billion, while adjusted EBITDA margins are projected to expand to 21% to 23% from 17.4%. TKR 1Y mountain Timken (TKR), 1 year Why now? Even after a 30% market-beating run this year, the stock is still cheap. Let’s do the math. If Timken achieves its goal of earning $8.50 a share, that gives it a forward price-earnings ratio of about 15. The industrial sector currently is trading for about 27 times earnings and historically over the years the average company in the space has traded at a multiple of 19 to 20 times. Bottom line I’m getting a very nice discount for what I think is a great turnaround story with AI growth at its back. Disclosures: Link owns Timken shares in her Large Cap Core portfolio at Hightower All opinions expressed by CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. This content is provided as part of our editorial output for informational purposes only and does not constitute financial, investment, tax or legal advice or a recommendation to buy any security or other financial asset. The content is general in nature and does not reflect any individual’s unique personal circumstances. The above content might not be suitable for your particular circumstances. Before making any financial decisions, you should strongly consider seeking advice from your own financial or investment advisor. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.Read More
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