Of course, a decent balance sheet will carry you only so far, and Tecumseh needs to start generating a positive bottom line, which it has done just once in the past eight quarters, and that particular quarterly profit was due to one-time non-operating gains.
Cost-cutting should help, as should a recovering global economy. In 2012, Tecumseh generated just 22 percent of revenue from North America. The bulk of company revenue, 54%, was from South America (30%), and Europe (24%).
Since the company's products are commodity based, the price of copper and steel will affect the bottom line. To that end, Tecumseh is now using much cheaper aluminum in place of copper where appropriate.
In this case, patience is paying off, and we'll see if Tecumseh can deliver on the bottom line.At the time of publication, the author was long on Tecumseh. Follow @JonMHellerCFA This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.