Sun Hydraulics Corp (NASDAQ:SNHY)

Best in their field. Rapid growth ahead for this small-cap with great management and sound fundamentals.

http://www.fool.com/investing/small-cap/2011/11/09/is-sun-hydraulics-the-perfect-stock.aspx?source=isbsithla4140001

Solid performer long-term, buying on dip, which I believe is over doubts about their recent acquisition.

Founded in 1970, Sun Hydraulics Corp is of the leaders in designing and manufacturing high-performance screw-in hydraulic cartridge valves and manifolds. Since it went public in 1997, it has been rewarding shareholders every quarter by paying a dividend and also has a history of special dividends.

Customer Dependence: No one customer makes up greater than 7% of sales, so a blow to one won’t have huge implications on Sun.

Sales Breakdown by Region (Q3 2010):
North and South American: 45%
Europe: 32%
Asia: 23%

Competition:
Full-line Producers
Niche Producers
Emerging low-cost producers
However SNHY maintains its edge through “quality, reliability, price, value, speed of delivery and technological characteristics of its products and services”.

When times were thriving, Sun was reducing debt and building up cash, to current holdings of $32million, allowing them to be able to deploy that cash if the right opportunity appears, however according to Allen Carlson (President, Chief Executive Officer, Director) during the Q2 2010 conference call he states “I don’t think anything is imminent in terms of acquisition.” The balance sheet is not only strong with a debt-to-assets ratio of 0% but even through 2009, their cash flow from operations has remained positive.

By looking at revenue trends, it is evident that Sun Hydraulics is a cyclical as revenues in 2009 dropped by 45% to $97 million, however, as the business climate improves; the business looks to thrive, with 2010 revenues back up to $150million.

With demand to rebound in 2011, and a better capture of the Indian market will allow SNHY to thrive and increase its sales, earnings, continuing its high productivity and quality through innovation and reward shareholders again and again. Insider holdings are at an encouraging 26.09%, however my insider transactions rating stands at neutral leaning towards negative.
I love how boring their annual report is, and how honest they are in telling the numbers, just plain black and white. They don’t focus on rewarding the shareholders in words in the reports, but just on customers, and instead put money where their mouth is (and where the shareholders pockets are) and reward shareholders in practice through capital gains and dividends. Their aim remains in offering superior products, reliable delivery, and as a by-product that makes SNHY a good investment.

See my March 2011 blog:
http://caps.fool.com/Blogs/march-2011-sun-hydraulics/556710

See my March 2011 blog:
http://caps.fool.com/Blogs/march-2011-sun-hydraulics/556710

Another firm with outstanding growth. An old line company. Good insider presence. Stable financial picture. An excellent track record to look at.

Great recent conference call. Clear that this company is in its "sweet spot"

check it out in two months

This is another one of my infrastructure investments and I think the economy is definitely back in the growth mode. This business with its product line will do well as the economy picks up.

SNHY

This stock has been in my Yahoo watch list for months, and I forget why. I remember doing research and liking what I saw, summer of '09.

This stock has managed its balance sheet very well during this downturn. Its price is the same as it was in early 2005 with a stronger balance sheet and positioning in the market. They also have not just eliminated positions to maintain margins. Rather, they have kept their knowledge base so when demand picks up, they are not stuck with training a whole new set of employees.

Their products are necessary for the eventual economic turnaround and their rapid delivery gives them a further advantage. With some companies, the attraction to buy comes from a low price, good management, lots of cash, or some other reason. This company has them all and then some.

This is a well run company with a solid management and a business model that values people and innovation. Sure making cartridge valves and manifolds is not the most exciting technology in the world, but they will always be needed for power transfer, heavy construction equipment will make a comeback, and SNHY is surely best-of-breed. Further, the fifty and two hundred day moving price averages are converging, so I expect surge in the price fairly shortly.

no debt, 5.81 current ratio, 63% net income 5y growth rate

Nothing beats insider ownership coupled with fabulous value.

buy on dip

Strong sales growth...just under everyone's radar. Good management and new growth in China as well as taking advantage of the stimulus package here should provide this company with $$$ down the road.

I just bought into this stock. Good management, good cash reserve of 35.18m with only around 3 to 5k in long term debt. Management is taking strong steps to lower cost during this down turn.