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Strategies & Market Trends : Value Investing

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To: Ditchdigger who wrote (46906)	3/6/2012 5:04:37 PM
From: E_K_S	Read Replies (1) of 78517

Gorman-Rupp Company (The) Commo (GRC) ADVFN link: advfn.com Yahoo Finance Company Statistics link: finance.yahoo.com I like the sector and that the company has very little debt (ie excellent debt profile) but the EK$ value is only $20.00/share, 40% below the current market price. So for me, it's just too expensive. I guess, I would need a compelling argument to buy them such as; they are the preferred suppler of pumps to the E&P developers and/or margins are expanding w/ greater than expected orders and/or some news that advances the state-of-the-art pump technology at a reduced cost of production. Last earnings report they exceeded sales projections but missed on earnings. ROA (9.8%), ROE (13.9%) and ROI (12.1%) all in the OK range but expensive at a 20 trailing PE IMO. ------------------------------------------------ FWIW, after a brief scan of the companies in the *US Industrial - Diversified Machinery sector* (using the ADVFN screener link above), I could find none that sell at or below my calculated EK$ value. The only one that comes close is Met-Pro Corporation Common Stoc (MPR) but it's 8% overvalued. My conservative "value" approach would be to add GRC to my watch list and see if at some point I can buy shares in the $20.00 price range. RAIL is one I recently discovered. They make rail cars, specifically for coal. They sell at 10 PE. Their EK$ value is around $25/share. The stock is selling around $25.50. I am watching this one and may have more interest if they plan on building OIL and/or NG tank cars. What is positive for the U.S. manufacturing sector, is RAIL is building new rail cars in the U.S. that are exported to other countries. It's not that often a U.S. company can compete using U.S. labor especially building rail cars for export. EKS

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