Companies that make filters: For maybe 10-15 years, I have been waiting for some of these filter companies like PLL or DCI to come down in price to where I would see them as a value. They may have got there at some point (2009?), but if so, I was looking elsewhere at the time.
finance.yahoo.com^GSPC
I come to the conclusion that -- like fooling some of the people all of the time -- there are some companies or sectors where you can impress some of the market participants (enough of them anyway) all the time, and that these filter manufacturing stocks are just going to sell at high multiples -- too high in p/e number for me to call them value plays.
So now I have decided I will give up waiting, and buy CLC, which I will call a relative-value. Having a relatively high p/e multiple, I would expect it to show pretty decent performance numbers, and on some metrics it does: Low d/e, positive cash flow, rising stated bv, maybe though only so-so to okay roe, decent profit margins, 29 years of dividend increases (although the yield itself is small), rising sales (slow growth though) and generally rising earnings. I guess a big attraction is the consumable nature of most filters, and that they may be only a small but necessary cost to the maintenance of customers' products.
clarcor.com
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CLC's not a stock for everyone, and maybe not a conservative investor's value stock. I'm figuring for me though I'll be okay if I can hold 5-10 years and the p/e multiple doesn't fall too much from the levels it's shown during much of the past decade (generally 18-20 range).
Fwiw, I also hold shares of Cummins (CMI) and GLW which also have filter manufacturing operations tucked in their business. |
