Sun Hydraulics Corp (NASDAQ:SNHY)

pencils2 (99.87) Submitted: 1/13/2008 10:57:05 PM : Start Price: $12.95 SNHY Score: +127.85

Sun Hydraulics designs, manufactures, and sells screw-in cartridge valves and manifolds used in hydraulic systems. The company is expanding globally and sells its products primarily through independent distributors. In fiscal 2006, 53% of Sun's sales came overseas. I have to admit that I'm still trying to completely understand Sun's products, according to their profile on Reuters their products, "control force, speed and motion as integral components in fluid power systems". Definitely not a very exciting company, and only one analyst follows the stock.One of the great things about Sun is the corporate culture. Employees are treated very well and a team mentality is really what Sun is about. Employees also receive very good benefits. Sun is doing something right, because since fiscal 2002 operating efficiency has strongly increased. The company's been a very consistent producer of cash flow as well as free cash flow over the past several years as well. The company has been able to use this cash to both expand the business and strengthen the balance sheet, which currently sits with $17.21 million in cash with only $750K in debt.A lot of things seem to be clicking for Sun operation-wise. Internationally the company still has huge expansion possibilities (China expansion has just started and India most likely will be soon) and the company is in a fabulous financial position to take advantage of those opportunities. However, grumpy old Mr. Market doesn't seem to be looking at that. Just three months ago in October, the stock was hitting $35. Today, it sits at less than $21. And did I mention that insiders own 31% of all shares outstanding? I can't help but think this is a great time to buy a business that should do very well as economies around the globe develop and expand.