Simpson Manufacturing Co, Inc. (SSD)

TMFPlatoish (32.79) Submitted: 10/15/06 11:10 AM : Start Price: $25.54 SSD Score: 10.91

Simpson has strong brands and is trading at a historically low valuation relative to future growth and current earnings. The forward growth thesis relies on the continued strengthening of local building codes in terms of wind shear and seismic safety requirements. They also have excellent opportunities abroad as other countries stiffen construction requirements. They are the leaders in their niches and continue to innovate with new product offerings. Construction slowdown will effect them to a certain degree, but probably not to the degree that the market has discounted. This is a strong niche business - nice and boring with fragmented competition. I think Lynch would like them. I know Royce does, as his funds own 12% of the company. They remain active in the promotional side of their business by providing educational seminars, an amazing set of useful, practical technical information on their website, and active participation in industry trade and standards organization. I rank it outperform from here.

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