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Strategies & Market Trends : Value Investing
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bruwin
E_K_S
Mattyice
To: E_K_S who wrote (55437)6/9/2015 9:49:35 PM
From: Spekulatius3 Recommendations   of 79085
 
The Tungsten tool business is very different than AP's special fabrication business. The cutting tool business has a tech component to it and follows the razor/blade model, where the tool is the blade. The tool may only costs $10, but determines the productivity of a CNC machines that may be worth a few hundred thousand dollars, so there is not much emphasis on price but rather performance.
Even the special fabrication business is a tough business, except when you are like PCP that have unique capabilities and are in market, where quality and quality systems are paramount (like the aircraft industry), PCP is a unique situation and most peers are really more in a commodity space.

FWIW, I like the GHM idea. It's quite cheap no the balance sheet is in a great shape, so they should be able to survive a downturn. Although their capabilities can be used beyond that the energy sector although it might take some time to get into new markets.
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