Robbins & Myers' Hidden Value

Shares of Robbins & Myers(RBN Quote) have basically retraced three years' worth of profits, as concerns around industrial stocks linger throughout the capital markets. However, a closer review of the company's business, management and growth potential clearly shows that the market is missing out on Robbins & Myers for both the short and long term.

Robbins & Myers is cheap. It trades with a forward P/E of 8 and EV/EBITDA of 3.9. The company is involved in three revenue segments: fluid management; process solutions; and its packing and secondary processing Romaco division.

A quick view from 30,000 feet up: Trading with an 8 forward P/E means that Robbins & Myers is trading at 0.75 times its 2008 revenue growth rate and at 0.5 times its 2009 rate. EBITDA margins are north of 25% companywide. Robbins & Myers has $3 in cash per share and will earn approximately $2.30 per share in 2008 and $2.40 to $2.55 in 2009. Discount those numbers, and this is still compelling.

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