Activist investor Engaged Capital has taken a major stake in Cognex (CGNX.O) and is pressing the machine-vision systems maker to slash costs and hire cost consultants — a move it says could help the company’s share price nearly double within two years. Speaking at the 13D Monitor Active-Passive Investment Summit in New York, Engaged’s founder and chief investment officer Glenn Welling described Cognex as “an AI company without the AI valuation.”
Welling did not reveal the size of the stake but called it one of Engaged’s largest holdings. Regulatory filings show the hedge fund manages roughly $700 million in assets. Cognex, which develops smart cameras and barcode readers used by clients such as Amazon and BMW, has a market capitalization of $7.7 billion, though its stock has dropped 50% from its all-time high four years ago.
Now under new leadership — with CEO Matt Moschner and CFO Dennis Fehr — Engaged sees an opportunity for a turnaround. Welling argued that Cognex’s profit margins could rise from 17% to around 40% through tighter spending and sharper focus on high-return R&D projects. By comparison, competitor Keyence maintains margins above 50%.
Cognex has recently revamped some of its products, using artificial intelligence to make them easier to install and operate, opening access to a broader customer base. Welling said Engaged has already held constructive talks with Cognex management and connected them with cost optimization consultants who have worked successfully with other Engaged-backed companies.