Graham Corp (NYSEMKT:GHM)

This track with oil futures and with the dollar valuation lowering oil goes increases.

sales 2013 up 39%
gross margin 31.6
shareholders equity increases 11%
book value up 7%

Graham announced that it has been awarded three orders totaling $7.0 mln; co supplying equipment to four new U.S. nuclear energy power plants under construction.

(who knew that we have 4 new nuke plants under construction in the US!)

Energy Steel acquisiton might get up to producing $50m annual revenue over the next 4-5 years. Synergy. That's more than the whole corp took in in '09 or '10. World economy will get back on its feet; GHM is positioned in a sweet little niche for the next wave of the energy services business.

E.g.: How do we make our refinery process crude that's more sour than our usual feedstock? Call GHM. How do we extend the life of our current nuke plant? Call GHM. How do we improve efficencies at the pump and conversion stages of our solar plant? Call GHM. How do we maintain our nuke sub and carrier fleets' nuke-steam motors? Call GHM.

Everything that matters, worldwide. Nothing that doesn't. I'm so bullish on this company, I could moo.

Price too hot for cash flow and weakening balance sheets are sell signs.

I have been researching this stock and it looks like a pretty good investment. I read this article on it: http://seekingalpha.com/article/245664-graham-corp-in-the-sw...

Anyone have any advice or thoughts?

Thanks so much.
Theresa

Top notch sales force has this company beating the bushes for new projects and growing the business.

World-wide sales with a lot of room to grow.

Perhaps my new favorite small cap stock. Just showed up on MFI screener with 12/31/09 earnings. Already a 5-star CAPS rating.

1) The CFO has bought shares at market recently.

2) EV/EBITDA ratio of 6.23. Cash net debt is about $5.85 per share (35% of share price).

3) Pays a small dividend leaving plenty of capital to grow.

They stumbled a bit on the most recent quarter, but order backlog is at an all-time high at $89.8M. Looking for a turnaround with their safe capital position.

Great balance sheet, nice play on increased natural gas volumes. Clued into this company by chk999.

just a guess

This is another microcap pick for me. I really like this company. Based on current earnings (which are conservative because they have been consistently trouncing projections) the stock is undervalued by 9%. This company is extemely well run and has produced earnings growth in all but 2008. In addition, the company cares about its tangible book value which has grown every year for the last ten years.

Started new username. See JohnEHibbert (old name) pitch.

The Company and its subsidiaries are engaged in the design, manufacture and supply of vacuum and heat transfer equipment used in the chemical, petrochemical, petroleum refining and electric power generating industries.

Profit Margin (ttm):18.26%
Operating Margin (ttm):26.64%
Return on Assets (ttm):22.33%
Return on Equity (ttm):33.54%
Market Cap (intraday):151.77M
Gross Profit (ttm):34.16M
EBITDA (ttm):27.49M
Net Income Avl to Common (ttm):18.08M
Total Cash (mrq):45.38MTotal
Cash Per Share (mrq):4.482
Total Debt (mrq):66.00K
Operating Cash Flow (ttm):11.13M
Levered Free Cash Flow (ttm):12.18M
Book Value Per Share (mrq):6.345

The company was founded in 1936 and is headquartered in Batavia, New York.

Graham Corporation designs, manufactures, and sells vacuum and heat transfer equipment worldwide. Its products include steam jet ejector vacuum systems; surface condensers for steam turbines; vacuum pumps and compressors; various types of heat exchangers, including helical coil heat exchangers.

products are used in a range of industrial process applications comprising petroleum refineries, chemical and petrochemical plants, fertilizer plants, pharmaceutical plants, plastics plants, liquefied natural gas production facilities, soap manufacturing plants, air conditioning systems, food processing plants, and other process industries, as well as power generation facilities, including fossil fuel, nuclear, cogeneration, and geothermal power plants.

This stock is tied heavily on the oil industry and will move up nicely if oil moves up.
However, the company is very small – this allows for tons of upside – but also I advise to buy on dips and to use a limit order.
While the company is about 1.5x my assessment of liquidation value – however there is potential for lots of growth is this niche market that GHM sells to.
Margins are excellent and management has a solid track record. The stock is way too small for any large funds to hold a stake in.

The technicals are sound – as it appears that a breakout is being attempted

Louis Navallier has really pounded the table on this little stock which has likely added to the recent bullish performance.

Earnings are this week – so be cautious buying ahead of the numbers. This stock has a very low float and can move very hard in either direction in no time flat.
Should earnings be sold off – I would use that as an opportunity to purchase shares.

GHM is my fourth largest holding- 5.8% current weight – at a cost of 9.84.
I lightened up on half the position $14-15….but only because it was my largest (non – FSC) holding at the time.
Large cash position and no debt = they will be here if / when oil moves north again. In a rising oil environment – GHM is a wonderfully exciting growth story. Pristine balance sheet.

GHM has also gone through a significant restructuring. I believe this will lead the company to produce significantly higher than historical cash flows….which are already pretty decent.
The risk / reward is still favorable at current prices – and becomes increasingly so $13 and below.

Tim Hanson, 5*

No debt, strong balance sheet. Good performance in the past couple quarters.

I didn't research this one a whole lot. Could be choppy the next few years depending how heavily they are weighted in the longer cycle businesses (i.e. power generation)

strong fundamentals

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