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Stock Pick of the Day: Sun Hydraulics Corp (SNHY)

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December 12, 2008 – Comments (0) | RELATED TICKERS: SNHY

Last time I declared MEDIFAST (MED) as Stock Pick of the Day and it has since risen to new heights almost every day like clockwork.  That stock has been hot and it will remain hot for a few more trading days.

Now... I draw people's attention away from GM, Ford, Chysler, or American Axle....or Etc.   Sure, share prices will drop like no tomorrow.... But so what?  Bad investment is still a bad investment.

Because with today's market crash about to explode out of the gate..... The Stock Pick of the day HAS TO BE an international company that produces parts for construction vehicles as well as boats/vessels and mobile applications and etc. 

And that brings me to Sun Hydraulics Corp that produces Hydraulic Cartridges and Valves.  I personally made $500 off this company 1Q of 2008.... This is a great international company on a growth path that simply hit a snag from the economic crisis going on and will come out of it just fine and perhaps stronger than ever.  Why?

Well?  President Obama promises tremendous spending in public works / construction.
Won't all of those construction workers require hydraulic valves/cartridges whenever things break down for repairs? Of course.  There's potential here for a solid 2009.

SNHY has a low 9.02 P/E and a Forward P/E 14.27...... This means that any major weakness in this share price is necessary before plucking any cash into it.  But, it also means that investors expect a slower 2009 for Sun Hydraulics.  I think they are wrong and I see tremendous growth for 2009.  Be a contrarian!

Stock price has already risen +4$ and new money needs to wait for this to come down..... Perhaps with today's market sell-off it drops $2 or more! You got yourself a Forward P/E of around 12 and that's your buy point!

Or to put better..... I'd place a buy on this no higher than:  $13 a share.  (But I think we see $12 on the dip)

At $13 a share or less that should lift the Yield to 2.5 - 3%.  $12 a share will push the yield closer to the breath taking 4% yield investors love.  Oh that's right.  The company has fully backed their 9 cents a share dividend.  That's a huge sign that the company sees growth ahead enough to support these payments.

So... Keep SNHY on your watch list and see if this thing drops like a rock and if so...
Ya got Stock of the Day material here:-)

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