AAON, Inc. (AAON)

Like its core business of heating and air conditioning, this stock tends to trade somewhat "hot and cold". Above average small cap - signficant FCF, high ROE, debt free, decent dividend. Over half of their business now derived from replacement sector, so fits as ongoing play on government incentives to efforts to improve energy efficiency. Likely to be a significant money maker at $19.21 for those with 3-5 year investment horizon.

Look to Oklahoma based companies to outperform the S & P and their sector competitors for the next 10 years as growth will continue in the state. Oklahoma is pro-business; it has good business tax incentives and is a right to work state. AAON is only one of many OK based companies that outperform their competitors.

Aaon is gaining market share from two very reputable and formidable competitors, Trane and Carrier. They currently have 13% of the pie in commercial rooftop units which means they have plenty of room to grow.

I also like the fact that their performance has everything to do with the company and nothing to do with outside market forces (can't say the same for oil stocks, mining stocks, Chinese stocks and until recently, building stocks). These guys are clearly "A" performers.

By the way, I'm putting real money on this one.

Fish where others aren't! This company is small and thinly covered. They have great fundamentals.

On the positive side, I like that they have been able to hold pricing and volume in the US. Holding pricing has, however, hurt their sales with national accounts. The positive side of this is that national accounts put way too much emphasis on price. AAON has reduced their dependence on these profit-sapping accounts.

I have one fairly significant reservation. They are entering the residential housing market with their smaller products. As the CEO stated in the conference call, this is a comodity driven market. The value of Aaon's products will be difficult to translate into profits. I feel that smaller companies like this would do better to stick to what they know well.

AAON's Canadian operations also are a difficult problem. I cannot tell how much of their finances are tied up there, but they have definitely been hurt by exchange rates.

They have some HUGE competitors: Trane and Carrier. It is important that AAON take market share from these two in its fundamental business.

What is not to like -- little dividend, small cap (little over 300 million), no debt, high growth (over 30% for the last 3 years), and silly low p/e (12). Return on equity is 28.1%. I need to do more reading, but this is now on a serious watch list!!!

They're increasing their dividend when everyone else is cutting theirs. They have a good P/E, room for growth and the resources to do it, and a lot of insider ownership.

Fortune 40

Will benefit from people replacing old AC units with greener alternatives.

See tenmiles' pitch for this gem.

Tenmiles

Making money and growing sales and earnings in this economy. And in the construction business. Doing something right.

Tenmiles

good small cap that is increasing EPS and paying a dividend

Summer time

Low debt, high potential for returns from a pe of 10. Small cap with 5 stars currently. Boring company with steady returns, everything a cautious recessionary investor should like.

Cheap. Nice dividend yield, nice growth rate, no debt, good margins and great ROE, ROC.

This account tracks the less exciting stocks from my watch list - companies that are easy to understand with clean balance sheets and good track records in relatively straight-forward industries.

The ROE is nearly 30% and hasn't been below 10% for the past 10 years. The company has not debt.

About the company:

"The Company is engaged in the manufacture and sale of air-conditioning and heating equipment consisting of standardized and custom rooftop units, chillers, air-handling units, make-up air units, heat recovery units, condensing units, coils and boilers.

HVAC competitors include Carrier (a UTX subsidiary), LII, WSO.

Safe haven.(grew or held strong through last 2 market crashes).good insider ownership, income statement, balance sheets, good p/e, great div compared especially to cap