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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (55437)	6/9/2015 9:49:35 PM
From: Spekulatius	3 Recommendations Recommended By bruwin E_K_S Mattyice Respond to 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.

To: E_K_S who wrote (55437)	6/10/2015 1:27:05 PM
From: Graham Osborn	1 Recommendation Recommended By E_K_S Respond to of 79085

Hey EKS, I'm not seeing much excitement in domestic/ international nuclear MRO. As far as the Navy contracts go that is solid guaranteed work (48% of backlog but doesn't convert til FY17) that should provide some downside. Management was pretty clear on the Q4 they expect the upside in refining: Again, I'd like our pipeline is largely weighted towards refining. That's always been our strongest hand to play. And to me it's just timing. Again, I wish I could be more definitive, but what gives us the enthusiasm and why we still feel we can execute our growth strategy from going from $100 million to $200 million, subject to market fundamentals is the enormity of our pipeline. It's just massive. And it's in our sweet spot; refining, petchem, and we always do well. When that pipeline is bulging it translates to orders at some point. There was a decent article in this morning's WSJ. Corpus Christi is blowing up right now. They've got oil coming out of their ears. I project Gulf Coast refinery expansion will continue to take advantage of that, once they've recovered from shell shock and see they've got to refocus their business. It might take a few Qs. But I think Graham sees that opportunity and it will play out. I'm still running around trying to calculate a true forward cost per bbl for US producers - THAT is the wildcard. -Graham