American Pacific Corp (APFC)

It's hard to find a company with the barriers to entry this one has, with a consistant and stable market, and an EBITDA multiple like this. They should be extremely boring, and extremely profitable (I love that combo) over the foreseeable future. Rapid depreciation of Pharmaceutical Fine Chemicals business (10 yrs) has EPS deceiving. Also, defense chemicals are not particularly sensitive to volumes since they are the only N American source of these strategic chemicals. They have contracts that ramp the unit price if the volume drops to keep them profitable and happy so the manufacturing capacity is available for the DOD should it ever be needed (they make a key ingredient in rocket fuel). On the down side, management is from the name, rank, and serial number school. They seem to forget that in trying so hard to not say something wrong, they pass up many opportunities to say something right. This is probably a habit picked up from their legacy defense work.