This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Under the Radar: Aaon May Grow in Rebound

Stock quotes in this article: AAON, WMT, MCD

"Under-the-Radar Stocks" is a daily feature that uncovers little-known companies worthy of investors' consideration. Check in at 5 every morning to find out about stocks that tend to beat their bigger brethren.

When the market's direction isn't clear, look for cheap stocks. That way, when growth returns, you will have more potential to gain. Here's a small-cap option with strong fundamentals that could benefit from a construction rebound.

TheStreet.com Ratings

Tulsa, Oklahoma-based Aaon (AAON) makes air-conditioning and heating products for the commercial and industrial markets. The company was founded as the John Zink Co. in 1928 and originally aimed to supply equipment for the oil industry.

Zink decided to diversify by producing heaters and air conditioners for Tulsa's wealthy elite. In 1968, the company started making equipment for businesses. McDonald's (MCD) became its first major customer in 1970, followed by Wal-Mart Stores (WMT) a year later. After a string of acquisitions and divestitures, the company spun off its HVAC unit, which became Aaon.

The company is in a unique position to take advantage of an economic recovery. Government stimulus projects and an improved housing market will likely fuel construction of new buildings and homes. They will need heat and central-air systems, helping Aaon boost revenue and earnings. We've rated Aaon "buy" for the past two years.

The company's first-quarter revenue fell 2% to $64 million, but net income climbed 5% to $7 million and earnings per share jumped 11% to 39 cents. Net margin climbed to 11%. Return on assets increased to 20% and return on equity rose to 28%.

Aaon's balance sheet houses $4 million of cash and no debt. A quick ratio of 1.16 indicates a strong liquidity position.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,804.71 -238.19 -1.40%
S&P 500 1,946.16 -26.13 -1.32%
NASDAQ 4,422.0850 -71.3050 -1.59%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs