Raven Industries, Inc. (RAVN)

Mmm...manufacturing...

Strong company with a growing flow control business segment. Should continue to grow long term with global recovery.

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.

Raven is a really sound company with good prospects unfairly beaten down...

Intrinsic value of $40.47

Yes!

Covered dividend at 2.3% yield, 20 straight years of raising it and plenty of room to run with it.

mgiv

RAVN appedars to have correceted it's selfa nd should have short tem bounce

Company looks to be solid with growth potential. I will be watching close for the next few months to see if the pick up any large government contracts.

I don't know much about this company, but it seems to be doing really good right now.

I HAVE JUST RECENTLY STARTED WATCHING THIS ONE BUT I LIKE WHAT I SEE SOFAR. I MAY BE A BUYER SOON.

It looks like the flight to aerospace is a good one over the long haul. After a period where many of the higher growth stocks have seen their PE ratios suffer, there may be a recovery at hand. The reason is the recent quarterly earnings, which have been better than expected. Commercial and military should have continued strength in the upcoming months. Agricultural products should also do well as high commodity prices are also delivering strength. Lastly, industrial products also look to do well in the upcoming environment as energy infrastructure builds continue as many emerging markets want to tap this sector while things are still good in the pricing arena.

Raven Industries looks to be well positioned in these upcoming cycles. They currently engage in flow controls, electronic systems and own a subsidiary Aerostar. They produce polyethylene sheeting which is used in packaging and barrier systems for agriculture and industrial uses. They can be used for gas and electrical barriers, moisture retarders and fumigation. An example of a usage would be for concrete slabs under a new building being constructed. Other liners are used for farm ponds, waste ponds or landfills. They also make covers to keep moisture off of hay, or used in conjunction with silos. With respect to drilling they make a plethora of different applications for drill pits and etc.

There electronics division is a full provider of contract manufacturing services. They are 44% industrial, 35% aviation, 10% GPS, 7% military and 4% medical. They offer advantages as they are insulated from the overall economy. They also produce flow controls. These are directly linked the agricultural arena. This particular division provides GPS for farm equipment to increase productivity of their machines. They also provide boom controls, planter controls and assistive steering to help aid in the agricultural sector.

With respect to aerospace and military this company has a division that is very interesting and not thought of much. They produce hot air balloon, parachutes and even military decoys (example is an inflatable tank). Their custom inflatables can be used to air drop supplies to military are conventional relief after a disaster. They also produce protective wear for those in harsh and hazardous environments.

RAVN looks interesting from a chart standpoint has they put a bottom in at $28. When they broke through $32 it looks like the stock will go to $34 in the short term on good earnings. Stockcharts.com has a bullish price objective on the current trend of $48 with respect to their double top breakout on May 2nd.

When you look at the industries they serve (especially agriculture), it looks as though growth estimates from Yahoo Finance could be low as they are coming off of a pretty good year. Earnings growth estimates for this year of 4.6% could be beaten easily in the right pricing atmosphere. On March 17th they increased their dividend 18%. Their flow controls group outperformed in the last quarter and they have a backlog in military parachutes. This is a bit speculative and has a whole lot to do with their performance with respect to agriculture, but I like this one as a long term buy on valuation.

elderhead

Testing out a portfolio of smallish-cap 5-star stocks found using the CAPS screener. All picks have at least 50 allstars backing them, which should be enough to minimize star rating fluctuations. It's only been about a week, and I expect a LOT of volatility, but I have high hopes for market beating performance. Time will tell...

See if he's right..

The best player on caps chose this. At some point, you have to listen to your superiors just to respect the fact that they have a blog that picked this one stock for the month.

Whether it’s a softening in the domestic oil and gas industries and a light hurricane season impacting sales in the engineered films division, a few ‘misses’ in new product launches in the flow controls division, or a delay in the start-up of a military parachute contract in the Aerostar subsidiary, the problems that faced Raven in 2007 all appear to me to be temporary – leading the ever myopic Mr. Market to offer us an attractive value proposition that I believe will lead to market-beating returns over the next 5 years.

And yes, I admit it. I’m beginning to sound like a broken record I know – but just in case you’re new to this blog, I’ve long believed that one of the best ways to outperform the market is to find good businesses with long track records of success that are suffering from temporary setbacks – and that Raven Industries fits that bill making it a candidate worthy of serious consideration.

This is my first experience with stock picks and am using a year+ performance history.