Ampco-Pittsburgh Corp. (NYSE:AP)

I have carefully looked at all the value metrics surrounding this stock. Every single one of the measures indicates it is an incredibly good buy at about price 16.6 or below.

Will always be in Demand!!!

stock of day....good dividend, all thumbs up over last few months.

Trading below tangible book. Conservatively ran business with nice balance sheet. Low debt. 3.7% div.

A nice play on the steel industry. Low debt. A nice dividend. A wide economic moat. Cheap. Nice insider presence. Some risks though. It would be volatile as well.

A well run business with a solid reputation. I don't expect high growth, but sustainable, predictable increases in sales as demand for steel increases worldwide. Compared to other companies in the steel industry, AP has the advantage of making a niche product - cold-rolled steel - in which they have developed a great reputation. The company is small enough to be agile, but dominant enough to call the shots. I like that combination.

Defensive. Sustainable dividend.

Buying because

- Family owned.
- Good executive compensation practices.
- Low debt (13.3m debt and 204.7m equity)
- P/S is low 0.7 compared to the industry (1.48).
- Sales are growing.
- Holds a niche market of making custom engineered metal products.

Positive:
- Fundamentally cheap (only 30% above tangible book value)
- Clean balance sheet, reasonable growth and margins
- Leader in a niche product (Cold-rolling steel equipment)
- China joint venture just about to start production
- No analyst coverage (hidden gem)

Negative:
- Insiders don't seem hold a lot of shares (but I'm not sure how realistic these numbers are because others speak about AP as a family business?)
- Asbestos litigation costs still a considerable drag on profits
- Cyclical stock

Category: PV+

Here's the buy rec:
http://www.fool.com/investing/general/2011/02/10/rising-star-buy-ampco-pittsburgh.aspx?source=ihpsitota0000001&lidx=4

February 2011.
5 CAPS stars

30% discounted small, unknown, unloved -- Ampco-Pittsburgh.

http://www.fool.com/investing/general/2011/02/10/rising-star-buy-ampco-pittsburgh.aspx

It is a stock with a long history, furnishing parts for companies who fabricate essentials. As the recovery progresses, industries will upgrade their facilities.

It has a good balance sheet and good management.

Ampco-Pittsburgh Corporation manufactures a variety of heavy metal products. Operations straddle two arenas. Its forged and cast steel rolls units, Union Electric Steel and Davy Roll Co., make hardened-steel rolls for steel and aluminum manufacturers. Its air and liquid processing segment comprises three companies: Buffalo Pumps, offering centrifugal pumps for refrigeration, marine defense, and power generation industries; Aerofin, driving finned-tube heat-exchange coils for construction and utility applications, and Buffalo Air Handling, supplying custom air-handling systems used in commercial, industrial, and institutional buildings. The stock price has shown a steady downward trend over the last six months. Insiders appear to be dumping stock. Charts show a bearish trend.

30,22 US$ el 30 Abril 2010

Steel going up!!!!!!!!!!!!!!

great valuation

fair value~~$68.45

This company makes rollers for steel and aluminum rolling mills. These are huge and huge but precisely machined steel rollers. The two subsidiaries that manufacture rollers, one in the US and one in the UK, have done nothing else for decades. The facilities and expertise to manufacture these rollers creates a wide moat. There are less than half a dozen companies in the world that do this.

The rollers need to be replaced on a regular basis because they are subjected to tremendous heat and mechanical stresses. The condition of the rollers is critical to the quality of steel and aluminum products. As the demand for aluminum and steel picks up, so will demand for these rollers as they need to be replaced more often. In addition, Ampco has 49% of a joint venture in China to produce even larger rollers. That plant is expected to come online in 2010.